The Power of Global Equities: A Proven Path to Long-Term Growth

When it comes to building and preserving wealth over the long term, global equities stand out as the only asset class that has consistently outperformed inflation. While cash loses value over time, and bonds may struggle to keep pace with rising prices, global equities have historically delivered strong, positive real returns. This makes them an essential component of any long-term investment strategy, particularly for retirees who need their savings to last several decades.

A simple way

One simple way to grasp the power of global equities is to take a look inside your fridge or bathroom cabinet. The products you use daily—whether it’s a soft drink, toothpaste, or shampoo—are made by multinational companies traded on global stock markets. Investing in global equities means owning a share of these businesses, benefiting from their growth and innovation. From consumer staples to cutting-edge technology, global equities represent the entrepreneurial drive that fuels human progress.

Human Ingenuity

At its core, the stock market is a reflection of human ingenuity. Companies are constantly evolving, finding better ways to solve problems, improve efficiency, and create value. Global equities embody this spirit of innovation, as businesses adapt to changing consumer needs and technological advancements. Over time, this relentless pursuit of progress has translated into significant wealth creation for long-term investors.

A common concern

A common concern for retirees is market volatility, but history provides reassurance. Someone retiring at 60 today could have a 40-year investment horizon. Over any long-term period, global equities have never been negative. While short-term downturns are inevitable, markets have always recovered, rewarding patient investors who stay the course. The lesson is clear: timing the market is far less important than time in the market.

Consumer demand

Investors often worry about political events, particularly leadership changes in the United States. However, the global equity market does not care who the president of America is. Markets are driven by corporate earnings, innovation, and consumer demand—not political cycles. While headlines may cause temporary fluctuations, the broader trend of global economic growth remains intact.

 

For those seeking long-term financial security, global equities remain the best vehicle for wealth accumulation. They offer protection against inflation, exposure to the world’s most successful companies, and a stake in the ongoing story of human progress. By embracing global equities, investors position themselves for a future of opportunity and growth, regardless of short-term uncertainty.

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Dirk Groeneveld, Certified Financial Planner.