Top Performing Investment Classes over 20 Years
Published / Last Updated on 12/08/2022
On many occasions clients ask us what the top performing investment, fund, or best place to invest money is.
We decided to look at various indices such as the FTSE 100, Dow Jones, S+P 500, German DAX, French CAC, Gold, Oil, Commodities and Bonds to track which sector was the best performer each year and which offered the best average return over 20 years (to end 2021).
- Large Cap stocks such as you will find in the FTSE 100, Dow Jones, Dax and CAC appeared 6 times for best growth in a year in the last 20 years and top highest average return over 20 years.
- Property via real estate investment trusts, commercial property funds and directly owned property also appeared 6 times for best growth in a year in the last 20 years and second highest average return over 20 years.
- Smaller and mid range companies such as in the S&P 500, the FTSE 250, 350 and All Share came top 3 times in the last 20 years and third highest average return over 20 years.
In fact, all three sectors came with 0.5% pa of each other at over 10% pa average.
- At the lower risk end, Global Bonds faired better than UK Gilts at nearly 5% pa average and
- Cash placed top just once in the last 20 years and had the lowest average return over 20 years.
What does this tell us?
We should all consider a balance of ‘blue chip’ large cap, small and medium cap shares or funds and the same again invested in property or property funds. You should hold some in bonds and only a minimal amount of emergency cash if you are investing for the long term. It is not right to have all your money invested in shares or property, a balanced portfolio leaning towards shares and property should be your starting point.
