In 2018, world stock markets went up. Then they went down, then up, then down and down again.
By the end of the year, the three major indexes tracking world stock markets were all flashing red. This means if an investor had decided to just purchase products that followed these indexes, they would have lost money.
The MSCI World Index, which – tracking the stocks in 23 of the most developed economies – is the financial sector’s “go-to” for taking the economic temperature, slumped 8.71%. Investing £100 in line with that index would have seen you finish the year with £91.30.
Not great if you are building for a financially secure future.
It is debatable as to whether these indexes should be used as a path for investors as the theory behind them is to demonstrate the overall movement of share prices. They track each company’s stock and do not either highlight more of the winners or dump those that are really struggling.
But there is another way to invest without blindly following these general ups and downs.