Oliver's Insights - Shares & the long term - how long is long?
4 November 2011 - With Europe continuing to cause day to day volatility – it almost defies logic that one little country amounting to next to nothing in terms of global economic activity is continuing to have such a huge impact on global investment markets – this note looks at shares over the long term relative to cash and bonds.
The key points are as follows:
• The historical record indicates that shares outperform bonds and cash over the long term.• But the long term should be seen as more than 10 years. It’s not unusual for shares to go through lengthy periods where they underperform cash or bonds.
• In this context, the poor experience of the last few years, and the last decade in the case of US and global shares, is not unusual.
