The annual UBS Global Investment Returns Yearbook offers an opportunity to take a step back from the daily news cycle and reflect on drivers of returns over the long-term. This is always a valuable exercise for investors.

Beating inflation over the long-term

In times of geo-political tensions, it can be easy to move to ‘safer’ investments. The perception of safety is largely illusionary. Shares continue to crush the returns of other asset classes over the long-run on a nominal and inflation adjusted basis.

Emerging markets aren’t all they are cracked up to be

Periodically the emerging market bulls will rear their heads. Now is one of those times. Huge untapped markets, fast economic growth and the promise that this time will be different make up the standard sales pitch. To date this pitch hasn’t delivered over the long-term.

The changing face of markets

The growing influence of the technology sector on US markets is widely discussed. The technology concentration of today pales in comparison to the dominance of railroad shares at the turn of the 20th century.

Interestingly, the UBS report points out that despite railroad shares dropping from 63% of the US market in 1990 to less than 1% today they outperformed the overall market. Declining industries can still offer strong returns.

Zooming out is easy to say and hard to do. The UBS Global Investment Returns Yearbook is a reminder of what works over the long-term.

Mark Lamonica

In this week’s edition…

With the upcoming budget increasingly likely to include bold proposals to alter the tax code Mark outlines three incremental steps with fewer unintended consequences.

Two opposing views on the impact of the war against Iran. David Tuckwell from ETF shares explores the secondary inflationary impacts of higher oil prices and concludes mortgage holders should be prepared for higher rates. Ashley Owens believes the war is another ‘get out of jail free card’ for politicians.

Investors looking for income should consider global infrastructure as yields are in the upper half of their historic range. Better yet, Edmund Leung believes there is room for dividends to grow.

With new leadership taking over in Japan, Leon Rapp outlines the challenges facing the country.

One driver of gold’s run is the shift in worldwide central bank policy with an emphasis on gold reserves over US Treasuries. Francisco Barillas Bedoya looks at the impact of this trend.

Can economic development be measured in terms of social progress? Kevin Fox looks at this emerging trend.

This week’s white paper from Fidelity explores four key levers that could help equity investors manage the challenges posed by geo-economic fragmentation, sustainability risks, AI, and market concentration.

Curated by Mark Lamonica and Leisa Bell

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