A lost decade in the London stock market

Richard Northedge says the FTSE’s dismal performance since the millennium will deter a generation of investors

The familiar fallback for fund managers when shares falter is that investment is for the long term. But how long is long? December marks the tenth anniversary of a stockmarket peak that has never been seen again. Money invested in the 1990s will be showing a loss more than a decade later. How long must investors wait for equities to come right in the long term?

In fact, the FTSE 100, the index of leading UK shares, is lower this week than in 1997, shortly after New Labour came to office. The long bull market in which Black Monday in 1987 and Black Wednesday in 1992 turned out to be mere blips continued into those euphoric Blair years when things could only get better — then, on the last day of the decade as the Dome disastrously opened and the river of fire flickered along the Thames, shares stopped rising and never fully recovered.