Stock markets were kind to investors in 2010. With little more than a week left, the FTSE 100 is at around 5950 and closing in on 6000 points. Breaking that threshold would represent a rise, from 5412.88, of 10.8%. But it was all about the second half of the year, with the index rallying from a year low of 4805 in early July. That recovery represents a rise of 22%.
The Footsie was not alone in delivering returns - most of the world's stock markets, after wobbles in January and April-May, had a good 2010. For instance, the FTSE Emerging Markets index [FT chart] is up 12.5% on a year ago and Russia's RTS index is 22% higher.
Even the long-term laggard, Japan, didn't do too badly for British investors. The Nikkei is down slightly on the start of the year, but some shrewd stock-picking by UK fund managers meant the Japanese fund sector delivered an average return of 14%.
These decent returns have surprised many investors, and come after a gain of 22% in 2009 for the Footsie. Add in income yield of around 3% for each of those years and the profits look even healthier.
It is a stark contrast to a year ago, when the UK economic recovery was far from certain. At that time, the first major warning signs about unmanageable government debts were emerging. Read More...
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