Old European money is held primarily in three assets: property, gold and art. A visit to the Sistine Chapel demonstrates the success of this basic asset allocation model. The Catholic Church has a perpetual wealth creation model that will last for generations to come.
Centuries ago, shares (part ownership of a business) existed in a very primitive form and were hardly considered a reliable store of wealth. Hedge funds were not even thought of, and I suspect ‘derivative’ was not even a word. While shares have been around in a structured format since the late 1800s, broader public interest in stocks is a more recent phenomenon.
The advent of the secular bull market in 1982 introduced the concept of share ownership to a greater audience; baby boomer investors embraced equities. The 1982 secular bull market turned out to be the greatest in the share market’s history. This secular bull market was the foundation stone on which the belief of ‘shares always go up in the long term’ was built.
Property, gold and art were cast aside as boring and ‘old world’. The new game in town was anything equity related. The love affair with all things shares hit a rough patch in 2000. Since then it has been an on-off relationship.