The Great Debate UK

Middle-age investment challenge


Stephen Peters

- Stephen Peters is an investment trust analyst at Charles Stanley, covering all closed-ended investment trusts and companies. The opinions expressed are his own. -

With between 5-25 years to go before one retires, the “middle aged” are in a conundrum at the current point in time. Having seen the value of their assets decline sharply in recent years, dreams of an early end to one’s working life have been put on the back burner for a little while.

Markets have done nothing over the last decade. Analysis by Barclays Capital show that UK equities have performed worse than straight and index linked gilts over the last 10 years, as well as cash. This is highly unusual.

Taking 10-year holding periods, going back 109 years to 1899, equities outperform bonds and cash 81 percent and 92 percent of the time. Extending the holding period to 18 years, that rises to 90 percent and 99 percent respectively. This all goes to show that equities are generally the best place to be invested for the long term – something a middle aged investor still should be doing.