For 26 years, Dimson, Marsh, and Staunton have published the Global Investment Returns Yearbook — a dataset spanning 35 markets and 126 years of returns across equities, bonds, bills, and currencies, with the 2026 edition expanding its analysis to include gold. It remains the most comprehensive long-run record of investor outcomes available.
Most investors will never read it.
The Yearbook surfaces ten findings. Among them, three stand out as most relevant to the long-term, owner-minded investor.
The number is well-known in investing circles: $1 invested in US equities in 1900 grew to $124,854 by end-2025 — a nominal return of 9.8% per year. Bonds returned $284. Bills, $69. Inflation consumed most of everything else.
What is less discussed is why.
Equities outperformed not because they are traded more frequently, analysed more thoroughly, or held by smarter investors. They outperformed because they represent ownership stakes in productive businesses — entities that generate earnings, reinvest capital, and compound value over time. The return is a consequence of what the underlying asset does, not how actively it is managed.
This held across all 21 countries with continuous investment histories in the Yearbook. No exceptions.
Ownership is not a passive posture.
It is a deliberate one.
In 1900, roughly 80% of the value of US-listed companies was in industries that are now small or extinct: railroads, textiles, iron, coal, and steel. Technology and healthcare were almost entirely absent from public markets.
Today, those two sectors dominate. The industries that will dominate in 2126 are likely not yet clearly visible.
The Yearbook offers an instructive data point here: railroads, despite declining from 63% of the US market in 1900 to less than 1% today, actually outperformed both the broader market and their technology successors over the full period. The market had written them off. The businesses hadn’t stopped compounding. Growth narratives and investment returns are not the same thing.
Industries transform. But the principles
for evaluating businesses do not.
In 2025, geopolitics dominated investor attention. Conflicts, trade tensions, shifting alliances — the geopolitical risk index reached levels not seen since the Cold War.
The Yearbook ran a straightforward test: regressing future world equity returns against a geopolitical threat index, looking one month and one year ahead. The result was unambiguous — no statistically significant relationship either way.
This does not mean geopolitics never matters. World War I, World War II, and the 1973 Oil Shock all produced severe equity market dislocations. But in each case, the mechanism was economic — the disruption to trade, supply, capital flows, and productive capacity. The geopolitics was the trigger; the economics was the damage.
The practical distinction is this: geopolitical events that produce genuine, large-scale economic disruption matter. The persistent background noise of conflict, tension, and political volatility that fills financial media does not have a consistent relationship with long-run market outcomes.
For the long-term investor, the relevant question is not "what is happening in the world right now?"
It is "does this change the earnings power, balance sheet strength, or competitive position of the businesses I own?"
The data suggests that more often than not, the answer is no.
Economic fundamentals deserve the majority of your analytical attention. They drive long-run returns.
Not headlines. Not geopolitics.
126 years is not your investment horizon. Unless you began investing in your early years and managed to live past your 80s, this dataset is not your track record — it is a validation of sorts. For most investors — those who began allocating capital in their 30s or 40s — the past decade is closer to the lived reality. And over that same decade, the data tells a more complicated story: gold outperformed the S&P 500, passive index strategies delivered modest real returns, and geopolitical anxiety was constant.
So why does a 126-year dataset matter to you?
Not because the exact numbers apply. They don't. But because the structure of the lessons does. The mechanism that made equities compound over a century — ownership of productive businesses — is the same mechanism available to you over the next decade. The industries that dominate your portfolio in 2035 will likely look different from today's, just as today's look nothing like 1900's. And the geopolitical headlines filling your feed right now are, in all probability, the same noise that investors in every prior decade learned to look through.
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