Thursday 28th August 2008
It was announced yesterday in a report by Thomson-Reuters Lipper that the returns from saving accounts have been consistently higher than the returns from investing in shares in the last 5 years.
The report, which was commissioned by the BBC, has revealed that investors in the stock market would have made more money had they put their money into a savings account. It was calculated that if £1,000 was invested in 2003, it would now be worth £1,094 in an average UK stock fund but a typical savings account would have increased the amount to £1,358. This is a difference of over £250 in revenue.
However, several leading industry experts have dismissed these figures, saying that whilst savings accounts have appeared more profitable over the last few years, shares are more consistent in producing a worthwhile profit. This was shown in the calculations of the Investment Management Association, which highlighted the fact that had the same calculations been made on figures from July 2007, shares would deliver a much higher return than that from the savings accounts. Another analyst, Justin Urquhart Stewart, of Seven Investment Management, supported this by saying “It is about time in the market, not timing the market. It is always possible to pick out a period of time when one asset class will dramatically outperform another”.
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Investments
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