101 Years of Global Investment Returns.
The year 2001 was scarred by terrorism, and financial markets were beset by turmoil. As we look to the future, investors have more cause than ever to ask: Where are the markets heading? What returns can be expected from equities, bonds, and bills around the world? What are the long-term risks of stock and bond market investment? What are the likely long- term rewards?
We are pleased to acknowledge our substantial debt to Mark Brown, formerly of ABN AMRO, and to Chris Johns and Kevin Darlington of ABN AMRO. Without their encouragement, this book would not have seen the light of day. We also received generous help and guidance from many colleagues. We would particularly like to mention the suggestions and encouragement we received from John Bachmann, Dale Berman, Peter Bernstein, Dick Brealey, Roger Brown, Ian Cooper, Ken French, Will Goetzmann, Marty Gruber, Harry Markowitz, Narayan Naik, Harold Rose, Stephen Schaefer, Bill Sharpe, Jeremy Siegel, and Jack Treynor. Our confidence was raised by being awarded the Inquire UK and Inquire Europe medal for research innovation, and by being awarded first prize by the Institute for Quantitative Research in Finance (βQ Groupβ) in its Roger Murray Prize Competition; we appreciate the esteem with which the prize committees regarded this research.
In chapters 18β33 within Part Two, we express our appreciation to colleagues who assisted us with data on individual countries. We especially wish to thank those who made available proprietary, and sometimes provisional, estimates of long-term index returns. Without their contributions, our study would not have been so ambitious. They include Philip Brown and John Bowers (Australia), Jan Annaert and Frans Buelens (Belgium), Pat OβBrien and Lorne Switzer (Canada), Claus Parum and Allan Timmermann (Denmark), Georges Gallais- Hamonno (France), George Bittlingmayer and Richard Stehle (Germany), Shane Wheelan (Ireland), Fabio Panetta (Italy), Kenji Wada (Japan), Roger Otten and Frans van Schaik (The Netherlands), Colin Firer (South Africa), Santiago Valbuena (Spain), Per Frennberg and Bjorn Hansson (Sweden), Daniel Wydler (Switzerland), Stefan Nagel and David Stolin (United Kingdom), and Ken French and Jack Wilson (United States). Of these, Jan Annaert, Frans Buelens, Lorne Switzer, Claus Parum, and Colin Firer undertook special-purpose data col- lection and index construction, expressly to rectify gaps in our series. We are doubly indebt- ed to them.
As described in Part Two, we went back to original sources for compiling the UK, Irish, and South African series. We are grateful to the staff at the Guildhall Library and at the British Library for their assistance in accessing historical documents; staff of the London Business School Share Price Database (LSPD); and London Business School doctoral students who worked with Stefan Nagel on compiling the UK accounting data used in chapter 10. We thank Bryan Taylor of Global Financial Data for providing exchange rates and supplementary index data, as described in Part Two. We also thank Anna-Maria Velioti for her careful read- ing of the text. As we developed the text for publication, we received wise and patient counsel from Andrew Lansdown and Polly Trotman of ABN AMRO, Richard Baggaley and Tim Sullivan of Princeton University Press, and from their respective colleagues.
Finally, the closing stages of writing and producing this volume tested the endurance of most of our friends and families, and particularly Helen and Steff. Their names, too, should really be on the spine of this book.
