William Bernstein, the esteemed financial expert, once noted the importance of understanding market history to make wise investments. By delving into the past, we can foresee potential pitfalls and rewards our investment choices may bring.
In the realm of investing, first-world equities reign supreme for most portfolio holders. However, to truly grasp the long-term performance of the World index, one encounters hurdles. The two primary benchmarks tracing back decades are out of reach behind paywalls, leaving everyday investors in the dark.
In light of this challenge, a new World index has emerged, stretching back to the aftermath of World War One. This innovative index, crafted from historical data sources and meticulous calculations, aims to shed light on the evolution of equities over the last century. Though not flawless, this new index promises to provide valuable insights into the realm of global investments.
In the following sections, we will explore the journey of world equities from 1919 to 2023, comparing the new index with established benchmarks like US and UK equities. Diving into annual returns, growth charts, and market dynamics, we will unravel the intricacies of global investment performance.
Key Points:
1. World equities growth between 1919 to 2023:
- New index offers an insight into long-term performance.
- US equities overshadow global growth.
- UK investors struggle with home bias despite market performance.
2. Annualised returns in GBP (% per annum) for different timeframes for different indices: - US equities outperform on all fronts.
- World index showcases consistent growth over time.
3. Risk and Returns analysis for World, US, and UK equities: - The World index proves less volatile and on par with US returns.
- Broad diversification offers risk-adjusted benefits.
4. Market share insights and global indices composition: - US dominates MSCI World index.
- Market capitalization comparisons reveal historical trends.
In conclusion, while the US continues to hold sway over global equities, the rest of the world presents opportunities for diversified investments. By examining historical data and emerging indices like the new World index, investors can gain valuable insights to navigate the ever-evolving landscape of the financial markets. To quote William Bernstein once more, "the best investments are made when things look the worst." So, let’s dive into the past to chart a course for future financial success.
