2012 – The Year It Didn’t Happen
Judging by last year’s financial headlines, investors would have spent much of their time anxiously awaiting one financial calamity after another that failed to materialise. The euro zone did not fall apart. China’s economy and stock market did not crash. The bond market did not implode.
Instead, our belief that consistently owning a share of the world’s businesses will prove worthwhile was borne out with UK Smaller and UK Value Company shares delivering returns of 30.69% and 21.91% respectively. Indeed out of the forty-five global stock markets tracked by MSCI, only three posted negative results in local currency (Chile, Israel, and Morocco), with Turkey leading the pack at 55.8%.
Conversely your best performers in 2011 UK Conventional and Index Linked (IL) Gilts were 2012’s poorest performing asset classes with Gilts fractionally down in value and IL Gilts posting a small gain.
As is so often the case, the rewards offered by the world’s capital markets are worth sticking around for but crucially require a combination of investor discipline and a detachment to what most of what the ‘financial press’ is saying.
(Source: Dimensional Fund Advisors/Trust Net)
Note: Past performance is no guide to future performance. You may not get back the orginal amount you invested.