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Drip-feeding
There is no reason why the current bear market will only last for the same amount of time as the dotcom bubble case , the end of the five-year period specified above brought you within touching distance of the financial crisis , when investors saw another fall of close to 40 %. Had you started drip-feeding your money into markets over 10 years instead of five at the height of the dotcom bubble , your £ 12,000 investment would have been worth £ 14,476 at the end of the period , a compound annual growth rate of 1.9 %. Had you invested £ 12,000 in an absolute return fund at the peak of the dotcom bubble , that 2.6 % annual growth rate would have turned it into £ 15,511.5 if held for the next 10 years .
The worst-case scenario Yet the bad news is that a 10-year bear market isn ’ t particularly excessive . Duncan MacInnes , manager of the Ruffer Investment Company , points out that while equities should in theory make the most money over the long term , this isn ’ t always the case . “ There have been long periods of time where stocks haven ’ t necessarily delivered the high single-digit returns the textbooks teach everyone they do ,” he says . “ The most famous example was in the US from 1966 until 1984 , 18 years where the stock market went nowhere .” He adds : “ Your starting point
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