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International comparison

Perhaps you are thinking that the UK case is freakishly good, and investments in other countries’ companies would have lost you money. You are right to be sceptical. Shares are risky. Indeed, investors in many companies have lost all their money and entire markets have been wiped out, e.g. the Russian exchange after 1917. To put your mind at rest consider the return in the 19 leading countries shown in Figure 1.7. These are real returns for 112 years. Clearly there is a great similarity in the average returns across countries. Despite their dramatically different histories (wars, recessions, depressions, etc.) they all show returns above inflation.

However, it is important to note that the small differences in annual ...