Economy Power And Long Term Stock Returns
The recent US presidential election is coming to its final days. However, its unusual bitterness and sharp divisiveness among voters have been very discouraging. Many are disappointed by the slow economy growth. Some even hold that the US economy power has declined and the country is on the verge of losing its dominant number one position in the world, economically or politically.
Naturally, investors are concerned about their investment returns, especially in such a depressing state (certainly, this is a subjective view). However, putting the economic, political and even military issues aside, if investors look at the investment history, things are much brighter in a long term.
Long term UK stock returns
The United Kingdom was the number one economic power house in the world before World War I. It gradually lost the title to the US in the two world war periods. By the end of World War II, the US emerged solidly as the number one economy power house in the world. Many investors would expect that in the past 50 or 100 years, the US equity returns would be higher (or much higher) than that in UK, given the common sense of winners and losers. Well, in this case, they are wrong.
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