Rewards available for long-terminvestors

The consistent returns of the last two decades of the 20th century have been replaced by more stagnant markets. However, valuations are now reasonable, presenting opportunities for the long-term investor

In the 1980s and 1990s, there was a sustained bull market in which returns on equity investment were around double long-term levels. Starting from an initially attractive valuation basis and fuelled by a hugely favourable environment, the real return on global equities over these 20 years was the highest of any such period in the 20th century. The US market delivered an annualised 11.2% between 1979 and 1999 compared with 5.6% for the previous 80 years. Among major markets, only Japan did not perform. At first the bull market was driven by improving fundamentals. This had an impact bot...