“It is a truth universally acknowledged that equities will always go up in the long run,” says Philip Coggan in the Financial Times. Yet the FTSE 100 has gone virtually nowhere since 2000. Even when you count reinvested dividends, the annualised total return of 3.3% in the 20 years to the end of last year is underwhelming.
True, the dotcom bubble was at its height around the turn of the millennium. But US indices, which also experienced that boom, are up roughly threefold since then. The UK index lacks the kind of exciting tech companies that have set the world on fire over the last two decades.
Still, America’s tech-heavy-index can’t outperform forever, says Russ Mould of AJ Bell. If we are heading for higher inflation, then “history suggests that you want to own real assets, or shares in them – commodities, miners, oils and property… the UK marketis ideal”.
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
British shares are also far cheaper than their US counterparts. Trading on a cyclically adjusted price/earnings (Cape) ratio of 15.2 as of the start of the current quarter, the UK market is on a discount not only to most developed markets, but also to emerging ones such as Thailand and Brazil. The US is more than twice as pricey on the Cape measure. After two decades of disappointment, the FTSE could be heading for happier years ahead.
-
73% of savers plan to rely on partner’s pension in retirementA new survey suggests the majority of people may lack financial independence in retirement, with almost three-quarters set to rely on their partner’s pension
-
How much you need to follow the 25x retirement rule – will you have enough to be financially independent?We explain what the 25x retirement rule is and the amount you would need to be financially independent in retirement.
-
'The rise and fall of Kodak is a lesson for the tech giants'Opinion The long decline of Kodak – a once-dominant company – shows why no business is safe from disruption, says Matthew Lynn
-
8 of the best properties for sale with kitchen gardensThe best properties for sale with kitchen gardens – from a 17th-century timber-framed hall house in Norfolk, to an Arts & Crafts house in West Sussex designed by Charles Voysey with a garden by Gertrude Jekyll
-
Why investors can no longer trust traditional statistical indicatorsOpinion The statistical indicators and data investors have relied on for decades are no longer fit for purpose. It's time to move on, says Helen Thomas
-
Investors rediscover the virtue of value investing over growthGrowth investing, betting on rapidly expanding companies, has proved successful since 2008. But now the other main investment style seems to be coming back into fashion.
-
8 of the best properties for sale with shooting estatesThe best properties for sale with shooting estates – from an estate in a designated Dark Sky area in Ayrshire, Scotland, to a hunting estate in Tuscany with a wild boar, mouflon, deer and hare shoot
-
The most likely outcome of the AI boom is a big fallOpinion Like the dotcom boom of the late 1990s, AI is not paying off – despite huge investments being made in the hope of creating AI-based wealth
-
What we can learn from Britain’s "Dashing Dozen" stocksStocks that consistently outperform the market are clearly doing something right. What can we learn from the UK's top performers and which ones are still buys?
-
The rise of Robin Zeng: China’s billionaire battery kingRobin Zeng, a pioneer in EV batteries, is vying with Li Ka-shing for the title of Hong Kong’s richest person. He is typical of a new kind of tycoon in China
