THE FTSE 100 index, the main benchmark for British share prices, reached a record closing high on February 24th of 6,949.6. Relief that a deal had been reached between Greece and its creditors caused shares to rally across Europe. But the celebrations were restrained, given that it was more than 15 years since the previous peak was reached on the final trading day of 1999. In real terms, the Footsie is still 28% below its earlier high. Rapid change in Britain’s corporate sector means that barely half of the index’s 1999 constituents are still in it today. The previous peak was reached amid great enthusiasm for internet-related stocks but shares then retreated as the dotcom bubble burst. The Footsie slumped again during the 2008-09 financial crisis, thanks to the hammering taken by banks such as Lloyds TSB; recently it has been held back by the fall in commodity prices which took a toll on oil and mining stocks. As a result, the current century has proved an exception to the old rule that equities are the best investment for the long run (see chart). The latest Barclays Equity-Gilt Study shows that, from the end of...
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