THE DECADE IN REVIEW: Best investments of the decade
A who’s who of the top performers of the past 10 years as revealed in our best investments of the decade survey. Clue: the man below's company might be among them
The 2010s have only a few days left to run, so now is the right time to judge the winners of what has been an extraordinary decade in financial markets. Welcome to our survey of the best investments of the decade.
Cast your mind back 10 years. The financial crisis and subsequent Great Recession hung heavy in the air and there was talk of “double dip” downturns. Central banks pushed interest rates to the floor and pumped out trillions of dollars of new money through quantitative easing.
The eurozone was in crisis and some feared the single currency could not survive.
What a contrast to the mood at the decade’s end. Stock markets hit fresh highs, unemployment in Britain and America reaches new lows and President Donald Trump’s policy of “running the economy hot” ahead of next year’s election seems to have ushered in a new era of prosperity.
Meanwhile, those who backed star stocks for 10 years will be counting bumper profits. Never, perhaps, was the “season of good cheer” more aptly named. So here are our best investments of the decade
Best investments of the decade
Best performing indices
A rising tide lifts all boats, so percentage increases help sort the outstanding from the also-rans when judging the best investments of the decade. Nowhere is this more true than in relation to individual stock markets.
Definitely in the latter category is London’s blue-chip FTSE 100 index. This rose by 41 per cent between January 2010 and Christmas 2019, from 5,412.80 to 7,632.24.
That may sound respectable but it is positively mediocre compared with the 187 per cent rise achieved by America’s Standard and Poor’s 500 index, from 1,123.58 to 3,223.28.
Triple-digit rises were seen also in Wall Street’s Dow Jones index, up 173 per cent from 10,428.05 to 2,8515.45, and Japan’s Nikkei 225, which rose by 122 per cent from 10,798.32 to 23.924.92.
Brexit uncertainty and political instability (with only two years and six months of majority government during the decade) may have played a part in keeping a lid on FTSE gains and, looking at the currency markets, this may seem also to have affected the value of sterling, $1.62 to the dollar on January 1 2010 and $1.30 by Christmas this year.
But the euro also took a beating against the US currency, down from $1.44 at the start of the decade to $1.11.
Best performing cryptocurrencies
It became routine for supporters of a new breed of computer-generated cyber-money to insist that national denominations were old hat and that cryptocurrencies represented the future. By far the best-known of these was Bitcoin and anyone buying this popular if mysterious asset at the start would have done very well indeed.
Bullion started the decade at $1,096.35 a Troy ounce and ended at $1,490.85, a 36 per cent increase. That is more than respectable in a period of low inflation – gold is most in demand as a hedge against devalued paper currencies – but comes nowhere near Bitcoin’s performance.
Launched in January 2009 at $327, it stood at $7,179.22 by Christmas 2019, a rise of 1,307 per cent. But those early investors will have needed strong nerves, as there has been a great deal of volatility on the way.
Fans of the yellow metal may well retort that gold as an asset has been around for thousands of years, rather than just 10.
Best performing commodities
Some Bitcoin fans have described cryptocurrency as the “new gold”, because like bullion there is a limit as to how much can be produced, thus preserving its value. This prompts us to examine the performance of “old gold” itself during the past 10 years.
The other high-profile commodity, oil, managed a 42 per cent increase from $45 a barrel of Brent crude at the start of the decade to $64.09 by Christmas 2019.
Best performing stocks
If one story dominated financial news in the 2010s, it was the performance of the stellar stocks of the digital revolution, hot favourites to be named best investments of the decade. For example, anybody who decided earlier in the decade that social media leader Facebook had been overhyped will have missed out on an extraordinary amount of upside.
Available at $38.23 on May 18, 2012, the shares stood at $205.12 by Christmas 2019, a rise of 437 per cent. Not bad for a site that started out as a dating service for students at a single university.
Then there is Amazon, a name synonymous with a retail revolution. The stock opened the decade at $127.14 and is ending it at about $1,789.21, a 1,307 per cent increase.
But even Amazon is dwarfed by the increase in value of shares in Tesla, maker of hi-tech vehicles, whose stock became available on July 2, 2010 at $19.20 and stood at $425.25 by Christmas 2019, an increase of 2,115 per cent.
Set against this, the 363 per cent rise of search engine Google, from $290 in January 2010 to $1,344.33 by Christmas 2019, seems modest.
The data harvested by the tech giants has been described as “21st-century oil” because of its great value to marketing companies and others. But the decade was less kind to those in the world of real oil.
Exxon Mobile saw its shares creep up by 1.32 per cent from $69.11 in January 2010 to $70.02 now. BP fared even worse, seeing its stock drop from £600 to £487.20 by the end of the decade, a 19 per cent decline.
Unloved stocks do come back into fashion and perhaps the 2020s will see Big Oil back in favour. However, with increasing demands for countries to go carbon neutral, it would be prudent not to bet on it.
Not that highly burnished new-tech credentials were any sort of guarantee of market success. Uber, the lift-sharing platform feted for making taxi services available to everyone, launched its shares on May 10 this year at $41.57 and by Christmas they had dropped 27 per cent to $30.44.
Investors may have been deterred by the regulatory problems encountered by Uber in a number of cities, including London.
Similarly, the social media site Snapchat, which launched its shares on March 3 2017 at $27.09 has seen them decline by 42 per cent to $15.61.
So, one decade ends and what has already been dubbed the New Roaring Twenties begins. What markets, assets and stocks will roar in the 10 years to come cannot be known for sure but it seems likely there will be some survivors from our current crop of best investments of the decade and that there will be many surprises. We look forward to the ride.
FURTHER READING: High street brands that fell our of favour in 2019
FURTHER READING: Biggest crypto losers of 2019