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FTSE Returns Since 30th December 1999
Comments
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They're also very selective about their dates. December 30 1999 was the very peak of the dotcom bubble. You'd have to have been extremely unlucky (or foolish) to have put all your money into the FTSE on that particular date. Any other start date you could choose (except possibly just before the financial crisis) would show a better return - and most of them would show much better returns.The most import thing it shows is that when gold rampers and BTL rampers are saying the ftse hasn't grown, they always list the index price w/o divs.
Sow how many people actually did put their life savings into the FTSE on 30/12/1999 and got those returns? And how many invested on a different date or drip fed in over a long period, and have seen much better returns? I'd guess that the first answer is something like "three" and the second is "millions".0 -
They look like cash rather than real figures to me. The Retail Price Index increased from 167.3 to 257.5 between 1999 and 2014 - so divide by 1.54 to get the real returns. If you prefer CPI you can use 1.39.(i) When it says "value" does it mean after correcting for inflation? If not, has anyone got the figures for the "real" (i.e. post inflation) figures?
They'll be the return for the index itself rather than what a particular investor would have got. Dealing costs, fund costs and taxes will vary between platforms, funds and individuals, so aren't typically be included in tables like this.(ii) Dividend reinvestment matters a lot and therefore so do tax rates. Does the table assume that the investor is a basic rate taxpayer and that he pays no CGT as he trades? Or, presumably much the same thing, that the investments are held within ISAs?
(iii) Presumably costs must have been ignored?0 -
FTSE 100 since launch in 1984 isn't doing that bad using annualised performance...9.1%
MSCI World and FTSE All Share are showing 9.6% and 9.5% from the link..
http://www.trustnet.com/Tools/Charting.aspx?typeCode=NM990100,NUKX,NASX
MSCI..
https://en.wikipedia.org/wiki/MSCI_World#Total_annual_returns0 -
The most import thing it shows is that when gold rampers and BTL rampers are saying the ftse hasn't grown, they always list the index price w/o divs.
Indeed.
Much of my modest and passive investments and 2 pension funds date from about 18 to 12 years ago, and on my experience with those and the table in the OP I'd disagree not only with the gold fans but also those who insist it's hard to beat the index.0 -
Especially as the number of people who invested all their money at the worst possible date on 31 Dec 1999 and never invested since, is probably tiny.The most import thing it shows is that when gold rampers and BTL rampers are saying the ftse hasn't grown, they always list the index price w/o divs.
I was comparing £17k from FTSE to £18.5k from S&P with dividends which to me is pretty darn close. I think it's interesting how close that is too, even the FTSE100 is within the same order of magnitude whereas I'd thought the US had performed much better.bowlhead99 wrote: »Well it isn't virtually the same as the equivalent FTSE is it really. The US 500 is the giants of the index making up four fifths of total market cap, just like our FTSE 100 is about that in our market.Remember the saying: if it looks too good to be true it almost certainly is.0 -
My point was that what you think is pretty darn close (only one fifth extra profit in the US) is not a like for like comparison.I was comparing £17k from FTSE to £18.5k from S&P with dividends which to me is pretty darn close. I think it's interesting how close that is too, even the FTSE100 is within the same order of magnitude whereas I'd thought the US had performed much better.
You are comparing the US500, the large slow moving megacap leviathans of the US market, making up the top 80% of the market by market cap...
...with our FTSE All-Share which is NOT just the slow moving leviathans in the FTSE100 making up the top 80% of our market by market cap but ALSO contains the mid 250 which more than tripled in value and the smallcap which more than doubled in value. And all those brought together in the UK as the All-Share containing the boost from smallcaps and midcaps still only gives 70% total return over the time period, while the US slow moving leviathans by themselves produce 85%.
If you do the like with like and compare S&P500 with FTSE100, you get 85% over 15 years plays 50% over 15 years, which is quite a significant difference. In the US it meant you got 8.5k of profit for your 10k investment. In the UK you only got 5k. I would rather have 8.5k than 5k. It is 70% larger.
So I don't get the "hmm, I would have thought the US gave a better return, it is within the same order of magnitude". Well yes it's 8500 profit plays 5000 rather than 85000 profit plays 5000, there isn't a whole extra zero on the end. But it is still 3.5k extra profit and 3.5k extra profit on top of the 5k profit is a large percentage of extra money. It was significantly more lucrative to have invested in the US over that cherry-picked timescale.
The other US indexes which contain the midcaps will give better results than the S&P500. I'm not going to go chasing around for the data but based on S&P factsheets to the end of this August, Midcap 400 has done 8.69 annualized over the last decade compared to the S&P500 at "only" 7.15%. The Russell 3000 which I previously characterised as the total market was 7.9% (in other words somewhere between the midcaps and the total).
The UK Allshare would have been under 7%, i.e. less than the S&P500, with the UK100 below that.0 -
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They're also very selective about their dates. December 30 1999 was the very peak of the dotcom bubble. You'd have to have been extremely unlucky (or foolish) to have put all your money into the FTSE on that particular date.
BT was trading at £15.13p at the time. Today it closed £432.05p.
Glaxo likewise £17.50p. Today £13.29.
Wouldn't recommend looking at Barclays share price in the intervening period!
What's impacting the footsie now? Miners. Another version of the Dotcom boom.
Glencore floated at £5.30 in May 2011. Today it closed at £1.38p.
Markets are volatile. Far more beneath the surface than simply blaming the likes of LastMinute.Com0 -
True, but it only shows the futility of looking at past performance. Story in the Telegraph today shows some jobs where you would have to work 550 years to save enough for a house deposit. Some people spending 70% of their income on rent. So how much higher can house prices go?Chickereeeee wrote: »Compare FTSE +dividends to house prices + rental income over the same period though.......
C“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” --Upton Sinclair0 -
Well presumably if people are happy saving 550 years for a deposit, they wouldn't mind too much if it moves out to 600; in neither case would they be seen as 'propping up' the housing market as it currently stands. It's really the fact they're already spending 70% on rent which doesn't bode well for prospective increases to BTL incomes and overall prices.Glen_Clark wrote: »True, but it only shows the futility of looking at past performance. Story in the Telegraph today shows some jobs where you would have to work 550 years to save enough for a house deposit. Some people spending 70% of their income on rent. So how much higher can house prices go?
If interest rates go up - and it's pretty much accepted that they won't be going down from here - there will be plenty of people who no longer want to pay half a million quid for a 2 bed flat because their mortgage starts to cost them £2k a month in interest instead of £1k a month. That is much more of a challenge to the current prices than the fact that someone on minimum wage can't buy a mews in Mayfair.
But I agree, past performance is no guide to the future if it's driven by a change in attitudes from paying 2-3x your salary for a house, to 6-10x.0
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