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Historical insights to help navigate current markets

Equity returns are volatile, so it takes very long histories to obtain a realistic understanding of what long run returns can tell us about the future.

The 21st century is now 25 years old. Measured since the start of 2000, stock returns have been lower than over the 20th century, though global equity investors still enjoyed an annualized real return of 3.5% and an equity risk premium relative to bills of 4.3%.

Yet while many people consider the long term to be ten or 20 years, the Yearbook demonstrates that much longer periods than 20 years are needed to understand trends in risk and return from stocks and bonds, because markets are so volatile and variable over very long periods.

Across 35 markets

The core of the ��ţ�������� Global Investment Returns Yearbook is the long-run DMS database. This provides annual returns on stocks, bonds, bills, inflation and currencies for 35 markets. The unrivalled breadth and quality of its underlying data make the Yearbook the global authority on long-run asset performance.

Of the 35 markets covered, 23 have 125-year histories from 1900 to 2024. The remaining 12 markets have start dates in the second half of the 20th century, with either close to or more than 50 years of data. In addition, the Yearbook monitors 55 additional markets for which it has equity returns data for periods ranging from 14 to 49 years.

Dan Dowd, Head of Global Research at ��ţ�������� Investment Bank, said: “I’m pleased to once again collaborate with Professors Dimson, Marsh and Staunton, and our Global Wealth Management colleagues to deliver the 2025 edition of the Global Investment Returns Yearbook. The 2025 edition marks something of a milestone. With 125 years' worth of data, it equips clients across the firm with a rich framework for addressing contemporary issues through the lens of financial history.”

Mark Haefele, Chief Investment Officer at ��ţ�������� Global Wealth Management, said: “The Global Investment Returns Yearbook can help us see the long-term effects of following the principles of diversification, asset allocation, and risk and reward. It once again teaches that a long-term perspective matters, and not to underestimate the value of a disciplined investment approach.”

Professor Paul Marsh at London Business School said: “25 years have elapsed since our first Yearbook. 21st century equity returns have been lower than in the 20th century, while bond returns were higher. Yet stocks still outperformed inflation, bonds and cash. Global stocks provided an annualized real return of 3.5% and a 4.3% equity premium versus cash. The “law” of risk and return continued to hold in the 21st century.”