UK property shares outstrip FTSE 100
Wednesday 9 May 2007
UK listed property has outperformed shares in UK companies over the last twenty years, according to new research from Halifax Financial Services.The company found investors in the FTSE All Share Real Estate index have enjoyed better returns over five, ten and twenty years than those in the FTSE 100, with the five year figure in particular far outstripping the equity market.Over five years to May 2007 the total shareholder return for investors in the FTSE Real Estate index was 23.5pc per annum, compared to 7.2pc in the FTSE 100 and 8.6pc via the FTSE All Share.While less dramatic the trend is also apparent over longer periods, as a £1,000 investment in property would have returned £3,930 over ten years and £7,630 over twenty years, compared to the FTSE 100 returns of £1960 and £6710 respectively….read more
It is clear that investment in the property sector has borne fruit. Every homeowner has an interest in these numbers but they do not need confirmation of these statistics, just a simple look in any local property newspapers to compare house prices is evidence of the growth. The question we all want the answer to is "what will the next 5, 10 15 years bring? "I certainly do not have a crystal ball, but I do believe in fundamentals.
Here’s the first fundamental. Diversification works. It is irrelevant whether property is the top performing asset class in the years ahead, but having exposure to various asset classes means that over the next 10 or 20 year, you will capture the future success story. Diversification works.
Another fundamental. Markets work. The capitalist system encourages success and reward is achieved from taking risk. If the reward was greater by investing in property over the long term, why would anyone invest in equities? But if risk and return are related, then perhaps the next 20 year trend might show an asset class success story other than property!
Categories: Analogies, Philosophy
posted by Murray Round Wealth Management @ 17:10,
The Authors
Nicholas Round
Nic is the Managing Director of Murray Round Wealth Management Limited, who seeks to ensure the advice provided is truly independent. Based in Shropshire with clients local, national and worldwide, Nic has strived to find the best possible service for his clients needs, by researching and studying the market, trends and philosophies. Nic strongly believes Asset Class Management will bring his clients Financial Freedom, Independence and Happiness.
Kirsty
Kirsty is our communication guru. Managing information requires considerable due diligence and her passion for organisation gives the clarity we all seek. From Shropshire, with a Psychology Degree and much travelling, she is now back in Shrewsbury...and London often, keeping us all at Murray Round focused.
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