22nd Jan – Ashley Gardyne – Senior Portfolio Manager – International Shares

Judging by the newspaper headlines the last decade was a fear-filled one – but investors prospered anyway. Can investors expect the good times to continue in the 2020s? Or will the chickens finally come home to roost?

A decade of crises

Working for a bank in London I can remember the start of the last decade vividly. Outside our building there were demonstrators protesting about the damage banks had done to the global economy (quite rightly), and inside the building staff were wondering if they would still have a job next week (many didn’t).

The decade as a whole was plagued with worries, as you can see in the graphic below. It shows the biggest concern of global fund managers each month since 2011. The list started with the sovereign debt crisis in Europe (remember that the “PIGS” (Portugal, Italy, Greece and Spain) were all going to default on their debt and take the global economy with them?). Then there was the China hard landing, then rising populism (Trump & Brexit) were going to derail markets, then quantitative tightening and the trade war would finish us off.

But despite all of these fears, the 2010s somehow ended up being a great decade for investors. The US share market was up 256% (or 13% per annum). Very uncannily, the New Zealand market was also up 256%. Even investors in beleaguered Europe gained 112% (or 8% per annum).