This recently published study is a great reminder of the power of UK shares to out perform UK cash over the long term, and give a better chance of beating inflation.
It is a comparison of UK shares (or equities) versus UK cash and UK bonds detailing that there is a 91% probability of UK equities out performing cash over any 10-year period in the past 123 years. Meanwhile, over two, three, four and five years, the equivalent probability was 70% or above (and more than 60% versus gilts for all of the aforementioned consecutive, or “rolling” timeframes).
Looking at the investment world in this way also suggests that the balance of probabilities supports the idea that UK equities give you a better chance of beating inflation over the long term than cash, helping your spending power to hold up over time. The message is stick with UK equities over the long term and you’ll have a better chance of beating inflation, on the balance of probabilities.
Your risk approach will determine how much equity your portfolio holds. Speak to an adviser to ensure your portfolio matches your appetite for risk and capacity for loss.