What happened to the cult of Western equity?

COMMENT

Many investment professionals happily tell clients the right thing to do for the longer term is invest in equities.

Shares, they rightly point out, should provide you with rising income over time as dividends go up. As economies grow, so leading companies should grow with them. Typically UK funds have around 60% invested in a mixture of UK, US and EU equities. This worked well in the last century, with shares easily outperforming bonds and cash over most time periods, and always over the longer time periods. If you work out how much people have made from shares over the last decade, the position looks rather different. Taking the 10 years to 30 June 2010, the overall total return from investing ...