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It’s true that the performance of the FTSE 100 has lagged behind the S&P 500 over the past few years. Yet over the long term, the index has provided some exceptional returns from growth stocks. If a 40-year-old was looking to build a portfolio from scratch based around growth ideas, here’s some indication of what things could look like at 65.
Running it back
To begin with, let’s consider how things could have gone in the past. If we rewind to 25 years ago (the investment time horizon for a 40-year-old to retirement, based on the retirement age back then), the FTSE 100 was at 6,658 points. It’s now at 8,220 points. This is just under a 24% return, or less than 1% a year.
This might not seem impressive, but remember this is the entire index, not specifically the growth stocks. For example, over this period technology stocks have done very well. RELX is a good example. The…
