Why the World Is Still Investing in America

The world continues to invest in America, despite frequent American criticism of our financial system. Observations made during travels to Europe, India, and China reveal a striking contrast between domestic perceptions and the global view. At home, discussions often center on volatility, dysfunction, and decline, while abroad, governments, companies, and investors seek to access America's built infrastructure.

Statistics underscore this reality. The U.S. now receives 20% of global direct investment, up from 15% pre-pandemic, and the U.S. equity market constitutes nearly 65% of global market capitalization. Even as de-dollarization discussions persist, the dollar index remains near a 40-year high. Central banks worldwide continue to engage primarily in dollar-based transactions, with roughly 90% of global transactions remaining in dollars, according to the Bank for International Settlements survey.

These figures do not guarantee America's position but highlight its dominant gravitational pull in the financial system. The ability to mobilize capital at scale is crucial for building AI infrastructure, expanding energy capabilities, and reshoring manufacturing. Furthermore, the strength of American markets reflects investors' willingness to finance tomorrow's economy, as evidenced by the S&P 500's role as a mirror of the U.S. economy and a window into future earnings and growth.

Beyond large public companies, the U.S. leads in startup creation, capturing 64% of global startup funding. This ecosystem empowers entrepreneurs to build global enterprises and provides Americans with avenues for wealth creation through investments. The integrated system not only fosters domestic business growth but also enhances America's global influence, as demonstrated by its historical role in initiatives such as the Marshall Plan.

However, America's financial system's success is not solely due to scale and innovation. It is built on robust public and private institutions that have withstood generations of scrutiny and have been fortified through the banking sector's competitiveness. Trust in this system, stemming from its track record, underpins global commerce, payments, and investment flows, and attracts investors seeking security, liquidity, and transparency.

While acknowledging that America's financial system is not without flaws, the prevailing narrative emphasizes its adaptability and capacity for reform. The same country that established the world's most extensive capital markets has continually renewed them through innovation, competition, and change. This resilience is evident in how American companies have navigated recent challenges while continuing to adapt, innovate, and grow.

Given America's past and present ability to evolve, it is prudent not to bet against the American entrepreneur. This resilience is a significant factor behind the global choice of America as a prime destination for investment. As noted, if another country could seize Wall Street, it would readily do so, underscoring the unrivaled appeal of America's financial ecosystem.