Insights from over a century in markets
Long term data can be obscured by the frenetic pace of the news cycle. An occasional reminder is helpful.
The annual UBS Global Investment Returns Yearbook offers an opportunity to take a step back from the daily news cycle and reflect on drivers of returns over the long-term. This is always a valuable exercise for investors.
Beating inflation over the long-term
In times of geo-political tensions, it can be easy to move to ‘safer’ investments. The perception of safety is largely illusionary. Shares continue to crush the returns of other asset classes over the long-run on a nominal and inflation adjusted basis.
Emerging markets aren’t all they are cracked up to be
Periodically the emerging market bulls will rear their heads. Now is one of those times. Huge untapped markets, fast economic growth and the promise that this time will be different make up the standard sales pitch. To date this pitch hasn’t delivered over the long-term.
The changing face of markets
The growing influence of the technology sector on US markets is widely discussed. The technology concentration of today pales in comparison to the dominance of railroad shares at the turn of the 20th century.
Interestingly, the UBS report points out that despite railroad shares dropping from 63% of the US market in 1990 to less than 1% today they outperformed the overall market. Declining industries can still offer strong returns.
Zooming out is easy to say and hard to do. The UBS Global Investment Returns Yearbook is a reminder of what works over the long-term.
