Monday, 20 May 2013

Shares have returned over 50%

The FTSE share index has stepped up to its highest closing level for nearly 13 years, since September 2000 in fact.

What does it mean? In purely index terms, it looks like a very grim decade for share investors.

They still haven't reclaimed the ground reached in December 1999 when shares reached their all time peak, with the FTSE touching 6930, compared with 6755 today.

But the index number doesn't reveal the whole story, because anyone owning shares receives dividends - as long as the company is doing OK.

If those dividends were reinvested in the stockmarket as soon as they were received, the total return, as it's called, looks much healthier despite the credit crunch and financial crisis.

According to Adrian Lowcock from Hargreaves Lansdown, the total return since 1999 is 52.97%, even though the index is 2.98% lower.

Mind you, consumer prices have risen by 35% over the same period - but that's another story.

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