Nothing has made people richer than investing in companies! Why? Companies are like living organizations which have mutative capabilities to adjust better than other asset classes. In other words, since companies are part of the dynamic economic system, they can adapt far better than gold, real estate, bonds, etc to deliver better value to investors. This plot shows the growth of $100 by asset class over the long term.
Comparing Asset Class Returns
Below, we show the returns of a $100 investment across major asset classes—from U.S. stocks to gold—between 1970 and 2023:
| Year | S&P 500 | Corporate Bonds |
Gold | U.S. 10-Year Treasury Bonds |
Real Estate | Cash |
|---|---|---|---|---|---|---|
| 1970 | $100 | $100 | $100 | $100 | $100 | $100 |
| 1980 | $226 | $181 | $1,578 | $141 | $229 | $192 |
| 1990 | $823 | $741 | $1,033 | $477 | $374 | $431 |
| 2000 | $4,060 | $1,886 | $734 | $1,067 | $536 | $682 |
| 2010 | $4,656 | $4,191 | $3,760 | $1,821 | $693 | $840 |
| 2020 | $16,890 | $8,349 | $5,059 | $2,802 | $1,155 | $891 |
| 2023 | $22,419 | $7,775 | $5,545 | $2,286 | $1,542 | $956 |
Numbers have been rounded. S&P 500 includes dividends. Cash represented by 3-Month U.S. T-Bills. Corporate Bonds represented by Baa corporate bonds. Real Estate represented by the Case-Shiller Home Price Index.
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Meanwhile, Nigerian banks are responding to fintechs with vigour: “Habaripay, the fintech subsidiary of Guaranty Trust Holding Company (GTCO), has reported a N2.17 billion post-tax profit year ended December 2023.” We will see how this battle will unfold in 2024 (we will discount 2023 as that was the year for Nigerian banks).
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