Friday, August 15, 2008

Sterling at 1.85 to the dollar

But someone - i.e. ME - has lots at an average of 2.02.

Labels:

posted by Matthew @ 8/15/2008 08:43:00 AM Comments: 0

Sunday, February 03, 2008

Shares fail

For as long as I can remember the advantages of investing in equities in terms of return have seemed overwhelming. But the last ten years have not been so good.

If you'd have put £10,000 in a Ft-se 100 tracker fund ten years ago, at end-Jan 1997, you'd now have £14,500, a return of 44.5%. That include dividends but doesn't subtract costs. It's a return of 3.8% per year, which is not much better than sitting in a high-interest savings account, particularly once costs are subtracted (although there will be tax to consider). For a sterling investor US equities would have been even worse - the same investment in the S&P 500 would have returned you just £13,560, or 3.0% per year.

To an extent this result is because of the dates chosen. Only four months ago the 10 year return was not 44.5% but 86%. Share prices rose strongly in late 1997, and have done poorly in late 2007. But on the other hand 10 years is 10 years, and I know at least one investor who took out an Ft-se 100 tracker (that he still has) in January 1997.

Labels:

posted by Matthew @ 2/03/2008 09:37:00 PM Comments: 0