Fool.co.uk Press Releases
25 September 2012

Long-Term Savers Must Be Investors

It’s Time To Get Britain Investing Says The Motley Fool

Long-term savers who have shunned the stock market over the last ten years have missed out on doubling their money, according to analysis(1) released today by one of the UK’s most popular online investing communities The Motley Fool at Fool.co.uk.

While it is no surprise that Britain’s savers are receiving a poor deal on their deposits, long-term savers simply cannot afford to ignore the stock market. The UK market (FTSE 100) has delivered a total return of more than 100% over the last ten years compared to a return of around 12% saved in a typical instant access savings account(2).

• £1,000 invested in equities 10 years ago would be worth £2,023 today compared to £1,127 in savings.

• £1,000 invested in shares 5 years ago would be worth £1,093 versus £1,030 in savings.

• £1,000 invested in the stock market 3 years ago would be worth £1,284 versus £1,006 in cash savings.

• £1,000 invested in a FTSE 100 index tracker 12 months ago would be worth £1,083 today compared to £1,002 in a deposit account.

David Kuo, Director at The Motley Fool, says: “It is understandable for some savers to prefer the apparent stability of cash to the volatility of the stock market. However, it is important to appreciate the difference between keeping some cash available for short-term needs and investing the rest over the long term to reap the benefits of generating real returns from shares.

It goes without saying that the stock market rarely goes up in a straight line. Instead, the returns from shares can sometimes tread water for a number of years. Consequently, it is vital to ignore short-term stock-market volatility.

Many Britons are unsure, unwilling and unprepared to invest in shares. As a result they are missing out on one of the simplest and best inflation-beating investments available. The Motley Fool is therefore urging regular savers to focus on investing over the long haul if they want to avoid seeing their money eroded by inflation.”

The analysis coincides with The Motley Fool’s Worldwide Invest Better Day campaign at www.investbetterday.com (September 25th of every year), to combat the growing crisis of investor confidence in the stock market, and educate, inspire, and motivate people around the world to take control of their financial future.

Tom Gardner, co-founder and CEO of The Motley Fool, comments: “Between Wall Street scandals and a slow economic recovery, people are growing increasingly disillusioned with investing overall. Sadly, they are robbing themselves of a stable financial future. Investing long-term in the greatest businesses of our time remains the most effective wealth-creator available to ordinary people, but far too many are discouraged, scared, or just complacent when it comes to investing.”

-ENDS-

For further information and/or to arrange an interview with David Kuo, please contact: Sonia Rehill on 020 7462 4308 or Soniar@fool.co.uk

Notes to Editors:

1) Value of £1,000 invested in a FTSE 100 index tracker.

After 1 yearAfter 3 yearsAfter 5 yearsAfter 10 years

£1,083

£1,284

£1,093

£2,023

Total return based on Bloomberg data on 29 August 2011, 2009, 2007 and 2002 until 29 August 2012

2) Annual return from cash and shares

 1 year3 years5 years10 years
Annual return from cash*

0.2%

0.2%

0.6%

1.2%

Annual return from FTSE 100**

8.3%

8.7%

1.8%

7.3%

*Based on total annualised cash rates calculated from Bank of England’s survey of monthly interest rates of UK monetary financial institutions sterling instant access deposits from households.

** Total return based on Bloomberg data on 29 August 2011, 2009, 2007 and 2002 until 29 August 2012

3) Gains from investing £1,000 in cash and shares

 1 year3 years5 years10 years
Gains from investing £1,000 in cash *

£2

£6

£30

£127

Gains from investing £1,000 in shares**

£83

£284

£93

£1,023

*Based on annualised cash rates calculated from Bank of England’s survey of monthly interest rates of UK monetary financial institutions sterling instant access deposits from households.

** Total return based on Bloomberg data on 29 August 2011, 2009, 2007 and 2002 until 29 August 2012

About The Motley Fool (UK)

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