Looking at the long-term superiority of equities

£100 invested in equities in 1869 would now be worth £16m and reinvested dividends are the main reason for this impressive growth

In the long run, equities have been a superior income investment compared with both gilts and cash. The dividends off equities have, in essence, been the key long-term reason for people investing in equities in the first place. That is not to say there have not been periods of time where there has been explosive growth in share prices, where companies that are either loss-making, or that are not dividend-paying, have not produced spectacular short-term performance. For example, the dot.com boom in the late 1990s, and the Nifty 50 boom of the 1960s and early 1970s. However, on a proper lon...