how do shares perform over long periods?

khampson

I was wondering what is the average percent shares rise over a period is time?

Keith

pqrdef

khampson wrote: »

I was wondering what is the average percent shares rise over a period is time?

It's not obvious that they do, at least in real terms.

Perhaps they did in the 20th century, but past performance is no guide to future performance. The world has changed. The West has had its turn and must now get used to relative decline.

Indexes cheat, because companies on the slide drop out and are replaced by companies on the rise.

Measures based on total return should look more promising, but the gain is likely to be accounted for by reinvested dividends.

cepheus

Real returns are 4.3% for US market and roughly 2.5% for UK market between 1921-1996 with a median of 1.5% after allowing for inflation. See page 31.
http://faculty.fuqua.duke.edu/~charvey/Teaching/IntesaBci_2001/GJ_Global.pdf



There may be a survivability bias in these figures.

Here are some recent returns of the UK market relative to savings rates

https://forums.moneysavingexpert.com/discussion/3228172[/QUOTE]

vax2002

They are like gambling on horses, a very small minority can make money but on the whole the average working person ends up getting robbed, cheated and skint.

cepheus

Remember those figures don't incudes commissions, charges or taxes and you can earn a fraction above inflation with National Savings certificates tax and commission free.

atush

vax2002 wrote: »

They are like gambling on horses, a very small minority can make money but on the whole the average working person ends up getting robbed, cheated and skint.

I haved breen investing a fair old while now-a decade or in fact 2 (ever since I got out of debt).

I have gained more than I have lost and am up overall. And took profits when shares double or even triple bagged so those assests are now in cash.

The working person gets robbed cheated and skint by leaving money under the mattress too.;)

Jegersmart

khampson wrote: »

I was wondering what is the average percent shares rise over a period is time?

Keith

Hi Keith

There are plenty of sources for information on this if you use Google.

I would like to add some balance to the extremely negative views already aired and say that I have averaged 12.xx% per year for the last 4 years on my ISA's - I was invested largely in Fixed Income - and I could have done better if I had got round to switching some to equities - or the right equities in that period. Withi holdings in ISA's and SIPP's etc, there is nothing stopping you semi-actively managing your exposure as well - so you select some areas and instruments that suits your view of what is going to grow and how much exposure you want and then keep an eye on the markets. Just basic stuff like whether markets are making new highs or are in up and downtrends etc - can help you go into Cash or defensive type funds when things are looking too rosy or are going down the pan. I appreciate that not everyone has an interest or even access to global market developments/prices but your provider should have some newsletters etc.

Getting your money to work well for you is something we all want but relatively few want to put in any work themselves. There are many people around who give an FM a few hundred k and then find out a year later they managed 3% profit over a year. That sort of thing is a sad state of affairs and you can help to avoid this by getting involved yourself. At least if I make mistakes myself I know that I am responsible, I probably learnt why and understand the mistake rather than giving my money to someone else and not even understand what the hell went wrong:D

Just my 2p

Jegersmart

p.s. with inflation running high I personally don't want my assets in Cash ISA's etc. - but thats just me. It depends entirely on your risk appetite/profile of course.

cepheus

Jegersmart wrote: »

p.s. with inflation running high I personally don't want my assets in Cash ISA's etc. - but thats just me. It depends entirely on your risk appetite/profile of course.

Doesn't that mean your stock market returns will have to meet inflation before you break even? With NS&I you can meet this level immediately plus a bit more, for limited amounts anyway.

Jegersmart wrote: »

I would like to add some balance to the extremely negative views already aired and say that I have averaged 12.xx% per year for the last 4 years on my ISA's -.

So what value is this information compared with a learned study, using a centuries worth of data and a large range of global stockmarkets? Even this may of limited value since the future could be very different than the past now the world has reached its resource limits and Developing countries will have their own markets and won't require the brands of the West.

If you are saying you can trade markets to exceed the market average I agree but very few people succeed and the fund managers are amongst the worst.

What date did you start from by the way, mid 2007?

cepheus

Here is the figure in the pdf report. It is not widely circulated, but it should be on the front of every investment product!

kidmugsy

cepheus wrote: »

Real returns..... between 1921-1996.

There may be a survivability bias in these figures.

[/QUOTE]

You bet there's some bias - for a start they begin too late: they should begin in, say, 1900, so that we can see the wipe-out that WWI brought to many countries. And where, for instance, is Cuba? That is indeed an example of survivability bias.

So now we ask ourselves: is Britain now, post Blair and Brown, more like Britain in 1900, or like Russia or Cuba in 1900?