17 November 2023
2 mins
Amid negative media narratives, the stock market's consistent long-term outperformance over cash holdings underscores the need to avoid short-term decision-making based on news cycles.
Over much of the past year, we have seen notable divergence between the negative economic/geopolitical news in the media and the positive performance equity investors have experienced. This acts as a useful reminder that equity markets are forward looking, and decisions over whether to invest or divest should not be based on short-term focused news headlines.
Equities are a long-term investment, and the longer you can stay invested the more confident you should be in getting rewarded for investing in this asset class (Based on history, equities have outperformed cash 91% of the times when held for 10 years or longer).
Equities are also expected to outstrip inflation over the long-term, for example, if you invested £100 30 years ago, today, adjusting for inflation, it would be worth £432 if it was invested in the equity market, and would be just £131 if it remained as cash.
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