Entrepreneurship - One of America’s Greatest Achievements
By: Brian A. Magnan CFP®, AIF®, CEPA®
Director – Magnan Family Wealth Management
Of course, our country didn’t invent entrepreneurship or perfect it, but I firmly believe that no other nation has excelled in this field over the past 250 years as well as the United States of America.
As you know, we prefer to be owners in great companies (stocks) rather than loaners to companies or governments (bonds). Many renowned entrepreneurs have founded and expanded their enterprises in the United States. Whether it was Ford, Rockefeller, Jobs, Carnegie, Edison, Walton, Disney, Morgan, or Musk, our country’s culture has uniquely positioned itself to foster entrepreneurial success.
The result has been remarkable. As a percentage of the world’s stock market capitalization, the United States has transitioned from 0% 250 years ago to nearly 60% today [1]. According to a study conducted by UBS, the annualized rate of return of our stock market from 1900 to 2025 has been an impressive 9.7%, accounting for 2.9% inflation, which yields a real return of 6.6% per year [2].
Since I never miss an opportunity to criticize bonds, their annualized returns since 1900 have been 4.6%. After deducting the same 2.9% inflation, bonds net out to a real rate of return of 1.6% per year. Of course, I could mention that taxes on corporate and government bonds have traditionally been significantly higher than those on equities, but that would be piling on. (It should be intuitive, but the long-term rate of return on savings after inflation is even worse.)
The good news is that it can be simple to participate with the great entrepreneurs of today and tomorrow. All you need to do is make a one-time decision to allocate your investment dollars to equities.
The bad news is that it is not easy. Over the past 250 years, the United States economy has experienced nearly 50 recessions [3]. Since 1900, our stock market has recorded losses exceeding 20% on 25 separate occasions [4]. Lastly, selecting individual companies is extremely challenging as more companies have gone bankrupt than survived.
Through our investment planning methods, we can determine the appropriate allocation of your portfolio to equities and calculate the necessary savings for your personal budget. Adhering to the investment plan and process can be the dominant determinant to your success.
However, in times of distress, we suggest you turn to faith in the resilience of our great entrepreneurs. As they have historically navigated through challenges, they often emerge stronger and continue to prosper.
Happy 250th birthday, USA!
Do something special for yourself.
Brian A. Magnan CFP®, AIF®, CEPA®
1. Mapped: The World's Largest Stock Markets (1900 vs 2023)
2. Global Investment Returns Yearbook 2025 | UBS Global
3. List of recessions in the United States - Wikipedia
4. Shiller
Wells Fargo Advisors Financial Network did not assist in the preparation of this report, and its accuracy and completeness are not guaranteed. The opinions expressed in this report are those of the author(s) and are not necessarily those of Wells Fargo Advisors Financial Network or its affiliates. The material has been prepared or is distributed solely for information purposes and is not a solicitation or an offer to buy any security or instrument or to participate in any trading strategy. Additional information is available upon request.
Investment products and services are offered through Wells Fargo Advisors Financial Network, LLC (WFAFN), Member SIPC. Magnan Family Wealth Management is a separate entity from WFAFN.