How unbelievable the American has outperformed the German stock market

The Germans love their German stock market.

Fortunately, the quantity of shareholders is now increasing, but investors within Germany are concentrating heavily on German companies and DAX index investing.

And here's why that was historically speaking a really bad decision.


At first you have to know that the DAX index is a performance index. In addition to the actual price development, a performance index also includes dividend distributions in the price calculation.

And that makes a huge difference if we compare different indexes from different countries.

So if we compare a performance index with a price index, this is simply wrong, cause the data cannot be compared with each other.


Because of that fact, I tried to find a more appropriate comparison

I compared the price development of the DAX and the Dow Jones Industrial from the low during the 2009 financial crisis till today.


Here is how the difference looks like between if we compare the DAX performance index with a DAX price index (without dividends included):

-> The performance index made 260%, while the price index made only 151%


And here is how bad the DAX index really looks against the DOW, if we compare both index based only on price (price index based):

-> The DAX price index made 151%, while the DOW price index made stunning 384%


But please don't get me wrong on this. Of course Germany has wonderful businesses, which are without doubt worth investing into. But mostly you won't find them within the DAX.

If we compare the broader markets, we can measure a huge difference in performance.


The DOW performed more than twice as good as the DAX.

And if you invest into a broader market you definitely should care about opportunity cost, related to different markets.