When the Mibtel was worth 30,500 points We are talking about September 2000, when the index Mibtel historical worth 30,500 points, well higher than the figure recorded in December 2010, just over the 16,000 points.
But the long-term equity investment is always profitable? Answering this question forces us to make the distinction: statistically equity turns out to be profitable in the long run, but this applies only if we consider very large baskets of shares, which could be a stock market index or a basket attached to it. When we speak of equity indices, we refer to the most famous and therefore more capitalized as S & P500, Nasdaq, the Dax, the FTSE etc..
If we focus our attention to the stock exchange index, one which has a significant historical series, the Mibtel, in this Dec. 30, 2010 was worth 16,121 points, compared with more than 30,000 of the new millennium, in relative terms we are more than 45% of negative performance. But one could argue that the time span of 10 years was filled with many positive and negative performance, and this is true, but if we had replicated the index, for example when you buy a fund in the year 2000, planning to do a long term investment (equivalent to a ten-year BTP), with a capital today we would be slightly higher than 50% of initial value (when coupled to this recital of fund management fees of 2% annual investment value would be less than half of the initial one.
It 's a hard reality, made critical by the fact that the highest point in the index of the decade, amounting to about 31,000 points in late 2006, the Mibtel made just under 2%, for if we consider the period 2000/2006 Mibtel has made about 1.7%, gross operating costs, inflation and so on, we would probably be finished at the same: this is the best result of the decade? I think so, running back for the other years were significantly better performance. In terms of equity the last decade was undoubtedly a disaster. The reasons for this are probably different from the economic and industrial policies of this country that is almost iniesistente at a concentration Power of listed companies concentrated in a few hands (see report on the Authority's corporate governance).
then return to the original question, the equity investment in the long period we did not seem particularly rewarding and not for the Mibtel.
If we consider the final year of economic growth in 2007, this index stood at 28,528 at year-end points, after which the chasm that has been touched in the spring of 2009 with 10,200 points share.
The skill lies in entering the market when it is at its lowest and exit when it is at its peak. Yes, of course, but if all, ironically, had this attitude, there would be only winners, but this is the beauty market! So there is no winner and loser of the first and the percentage is very low. We say that is the law of A, B, C: 80% of the market is in the hands of 20% of investors and vice versa, and I think that is true in the stock markets just as competitive as ours, but different matter for the markets such as the S & P500 or other emerging countries.
Just to make a quick comparison with an index of the neighbors, the DAX today quoata to about 7400 points, while in the early 2000 this index quoted at 6,960 points. To tell the truth to the max of the DAX early 2000 was roughly at 7,600 points, in practice those who have tried to replicate the DAX in recent years has come out far better than the Italian counterpart.
last financial crisis, since most of the indices, the DAX has returned to almost pre-crisis levels, while the nearby Mibtel is still a long way to go.
Andrew Tancredi - independent analyst
