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Credit Suisse Global Investments Yearbook 2019

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By end February the investment community is eagerly waiting for the publication of the new Global Investments Yearbook. This publication is a continuation of “Triumph of the Optimists: 101 Years of Global Investment Returns” (Princeton University Press, 2002) by Elroy Dimson, Paul Marsh and Mike Staunton.

Emerging marketsThe 2019 edition is focusing on emerging markets, with particular emphasis on the Chinese stock markets: plural indeed since both the Shanghai stock exchange (SSE, trading since 1990) and the Shenzhen exchange (SZSE since 1991) have been included alongside the Hong Kong Stock Exchange (HKSE, since 1986 as a merger of Hong Kong exchanges operating since 1891).

The long run ‘emerging markets’ segment is varying in composition, since some present day developed markets were to be qualified ‘emerging market’ in earlier decades. Despite outperforming developed markets over several decades, emerging markets suffered several historic impairments. Those setbacks have caused the long run emerging market return to fall short of that of developed markets. The most important setbacks have been the nationalization of Russian enterprises following the 1917 revolution establishing the Sovjet Union, the nationalization of all national industries by the Peoples Republic of China in 1949 and the plunge of Japanese equity following the WWII defeat and the following hyperinflation.

Investing for the long termThis is the second topic covered in more detail. One of the main points of view is the historic sector rotation that has taken place throughout more than a century. Leading industries have dwindled and the present day major enterprises pertain to industries that didn’t exist by the beginning of the 20th century.  Both the UK and the US stock exchanges are taken as examples.

Furthermore, comparison among three main asset classes (equity, bonds, bills – short term debt) proves equity to outperform in all developed markets and emerging markets with data available. With only one exception, bonds outperform bills over the long haul. Yet both categories lag equity. The ‘golden age’ for bonds is recent: the disinflation in most developed markets since the 1980′s caused interest rates to decrease gradually thereby boosting real returns on bonds.  Bonds have been particularly poor investments during periods of rising inflation and escalating interest rates.

Return differentials between equity and bonds/bills (called risk premiums) are shown across 21 markets. ‘Maturity premiums’ are what differentiate long bonds from bills. Those maturity premiums tend to vary over decades long interest rate cycles.

Individual marketsThis last chapter is much abbreviated in this summarized edition as compared to the full printed version. Individual markets covered are the US, UK, China, Japan and Switzerland.  Aggregate data for European markets and for the World are suitable benchmarks.

LinksPress release  of the Credit Suisse Global Investments Yearbook 2019 – summarized version.
PDF direct link to the Credit Suisse Global Investments Yearbook 2019 – summarized version.


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