Is 16.3% Enough?

March 1st 2005

There was an absolutely fantastic advert on the back of The Sunday Times this week for that old established investment group, M & G. The advert was brilliant; it included many of my own standard investment rules of thumb, it was interesting to read- and it had pictures in it (always a plus for us visual communicators)!

There were enough points to note that I could resent a whole course about it – in fact if you didn’t see it don’t worry as I have already cut it out and made 15 pages of notes on it- so it WILL be popping up in my future courses.

But the one I wanted to highlight today was the fact that the M & G Recovery Funds has returned 16.3% per annum since 1969. Staggering, and what a phenomenal performance, and the ad compares that return to that produced by the FTSE in that same time, which was a supposedly pathetic 11.7%.

I highlight these statistics because I am presented time and time again with people who compare the returns from property to that of returns from equities and they believe that equity returns are much worse than those for property. However, I know, and this advert proves to us, that the returns for both equities and property – over time – are generally about the same.

So most people accept quite easily that you can make 16.9% per year from property but don’t believe it can be done with equities – but as this lovely advert proved to us – oh yes it can!