Chapter 3
Market investment returns: will the markets make me rich?
The likely answer to this question is “no”. The financial markets should be seen as a place to protect and grow wealth. This chapter looks at expectations and uncertainties for future market returns. An important message is that equity returns are likely to be less favourable in the 21st century than they were in the 20th. But the main qualification remains that even over long periods of time, we do not know how markets are going to behave. Domestic Treasury bonds and bills are taken as being free of credit risk and provide safe havens for investors. Inflation-linked government bonds are an innovation that provides an important degree of security for cautious long-term investors. ...
