What is the Worst Investment of the Past 20 Years?

What has been the best or worst asset class or stock pick of the past 20 years and why? We asked two of market commentators to name and shame

Morningstar Manager Analysts 4 February, 2015 | 9:01AM
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Dan Kemp, Co-Head of Investment Consulting and Portfolio Management, Morningstar

While some commentators will point to specific companies that have gone bust or asset classes that have underperformed, the truth is that over such long periods of time, the key decision is whether or not to invest. Those who have shunned investment for the last 20 years have typically lost out to those that have embraced it. This reflects the old saw that ‘time in’ the market is far more important than ‘timing’ the market. While a well-managed and diversified portfolio may not make great headlines, or induce the feelings of euphoria and terror that accompany concentrated exposure to individual holdings, it is far better suited to achieving the most essential goal of investment, that is, to increase the net worth of those who entrust their money to us.

Jeremy Beckwith, Director of Manager Research, UK, Morningstar

The worst performing major equity market over the last 20 years has been Japan. A combination of  the companies who have placed the interests of their shareholders well below those of their customers, management and employees, a series of weak governments controlled by their officials, a Central Bank who were very late to end their war on inflation and even alter to realise that their true concern should have been deflation, a rapidly ageing, and now declining, population and a starting point of very high valuations have served to ensure terrible performance from Japanese equities.  By the time Prime Minister Abe was able to introduce radical new policies to get Japan out of its mess, the most powerful reflationary tool was currency depreciation, which, for foreign investors, has massively diluted the bull market performance of the last two years.

The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

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Morningstar Manager Analysts

Morningstar Manager Analysts  research and rate hundreds of OEICs, unit trusts and investment trusts available for sale in the UK.