Here are a few fun facts about the FTSE 100. Since the start of the century, the index has fallen more than 20 per cent three times and seen a further three drops of at least a tenth. Cumulatively, it took just over 13-and-a-half years to recover after these sell-offs, meaning prices have rarely been a source of comfort.
And yet thanks to the compounding of dividends, the Footsie has posted a positive total return in 58 per cent of months and 68 per cent of years. Assume distributions were reinvested across the quarter-century, and a paltry average annualised price rise of 0.9 per cent climbs to a just-about respectable 4.6 per cent.
In short, despite a series of painful setbacks and an often-feeble growth rate, the trend has been positive. Throughout, UK stocks have exhibited that prerequisite of equity investing: momentum.
