Global equities have now rallied 144% since the depths of the financial crisis in February 2009, even after the recent bout of stock market volatility. Bond prices, meanwhile, have risen nearly non-stop for three decades as yields worldwide have collapsed. Easy monetary policy, ageing demographics or emerging-market economic growth – pinpointing exactly what is behind such long-term trends is difficult, but one thing is clear: buy-and-hold has been a winning investment strategy.
Markets are not always so kind, however. Taking the longer view reveals that the UK stock market has undergone sustained periods without an increase, while the middle of the 20th century saw bond yields rocket. More recently, it took years for equities to recover from the bursting of the dotcom bubble and the global financial crisis. Many investment managers understandably worry about what could happen next.