All around the world, stockmarkets have been rising at a breakneck pace. Whether you are in America, Europe, Japan or India, share prices listed on a bourse near you have spent most of this year setting fresh records, only to break them again straight away (see chart 1). America’s S&P 500 index of large companies has rocketed by nearly 60% since a trough in 2022. True, Chinese investors are in a funk. But they cut lonely figures: exclude China from MSCI’s index of emerging-market shares, and the remainder have been clocking rapid gains, too.
To a certain extent, this record-smashing is to be expected. Dump the losers periodically, as benchmark indices tend to, and the history of equities is one long (albeit frequently interrupted) march upwards. Bear markets and crashes abound, but once prices recover to set one new high, a stream of others usually follows. This has led global stocks to deliver an annualised real return of 5.1% since 1900, and American ones of 6.5%. Worry all you like that the narratives being spun around today’s boom—from techno-euphoria in America to a corporate-governance revolution in Japan—are overblown, and that a reversal is coming. Those seeking riches should simply set aside such concerns and invest for the long run.