The key to healthy stock returns

UK stocks have eclipsed government bonds over the long term. But these gains are mostly not due to price rises.

The UK stockmarket had a lacklustre year in 2014, barely posting a positive return. But over the long term, equities have been the top performer among the main asset classes, as Barclays points out in the Equity Gilt Study.

Since the end of 1899, British stocks have returned an inflation-adjusted annual average of 5%, compared to 1.3% for gilts and 0.8% from cash. Over 50 years, equities also eclipsed UK government bonds, having risen by an annual real average of 5.7%, compared to gilts' 2.9%.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.