Will stock prices keep rising? Don't count on it

If you think the stock markets will continue to rise just because that's what they've always done, then think again. It could be time to sell out of equities.

If stock market returns have been good in the past, will they be good in the future? Listen to the financial industry and you'd think it was a given. But it isn't.

The value of a stock is, as John Bogle points out in today's FT, represented by one thing only: the discounted value of its future cash flow. You pay a price for it now in the expectation that the dividends you will get in the future will make the price make sense.

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Merryn Somerset Webb

Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).

After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times

Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast -  but still writes for Moneyweek monthly. 

Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.