How We Did With The Most Important Charts In The World 2025
Towards the end of 2024 we did three posts all named “The Most Important Chart In The World”. Today we will see how we did, and over the next few days we will post some charts that we think will be the most important for 2026.
Most Important Chart #1
First up we have SP500/MSCI All Country World Index Ex-US ratio with the US Dollar overlaid.
This was a win. Not only was it maybe the most actionable chart we posted, but all parts of it worked out. The US Dollar went down, and global stocks outperformed US stocks.
On a total return basis, the ACWI Ex-US is up +32.89% as of 12/29/25 and the SP500 is up +18.74%. Both went higher but foreign stocks beat the SP500 by +14.15%.
The USD, and this depends on what USD Index you use, was down between -5 to -10%. We like the Broad Trade Weighted Index for general purposes, but you can use the DXY, the Bloomberg USD Index, etc. After the giant 15-year uptrend the USD got hit this year, and as of this writing is not exactly looking bullish.
Most Important Chart #2
The next post was about US equity valuations and forward expected returns.
This was a loss, or maybe a shove?
Valuations are a great tool, but as we even noted in the post, they are not a great timing tool. Instead, they can tell you a lot about the next 5-10 years, despite not providing high signal value for the next year.
We can claim a shove if you look at relative valuations and relative performance. US stocks were and are expensive, and US stocks underperformed foreign stocks.
We can call it a loss because US stocks still went up this year.
Go ahead and call it a loss, we should not have used that as a “Most Important Chart Of The Year” and instead maybe done a post on “The Next 10 Years” or something.
Valuations still matter and it will be surprising if the next 10 years brings anywhere close to the same returns as the last 10 years, but for now the trend is higher so what do you do?
Most Important Chart #3
Our last chart was of “Withheld Taxes-The Ultimate Coincidental Indicator” and it was a win.
Still an underrated data series, the “Daily Withheld Employment and Income Tax Balance” from the Daily Treasury Statement is a real time indicator of employment and wages. The basic way to read it is to see if it is strong or weak on a year-over-year basis.
In our post we said that it was looking decent and that we expected it to continue to be that way for a while. Up until the last couple of weeks it literally flatlined YoY, and stocks kept going up. This despite the DOGE mess, continued layoffs in the corporate world, and the Government shutdown. Turns out wage growth, even when it goes sideways, usually means that money is going into the stock market.
What’s Next?
Over the next few days we will have some new “The Most Important Chart In The World” posts. They will be easy to grade-as opposed to the valuation post-and all but one will be new.
Happy Trading,
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