• History shows that missing just a few of the market’s best days in a 20-year period  can dramatically reduce long-term returns (see chart below)
• The market’s best days often occur right after its worst days which is counter to normal human behaviours as fear is most felt at these times
• Inflation is something not to be underestimated. Both cash and bonds have a negative real return since 2000. Bonds at -0.5% (UK government debt) and cash -1% (three-month Libor)
  • If cash had no return, and assuming 2% annual inflation, £100,000 today would have a real value of only £45,000 after 40 years (based on today’s prices)

Source:  JP Morgan S&P 500 total returns 2003-2023

How common are Intra Year declines?

Annual Returns and Intra Year declines for the UK large cap market

Source: JP Morgan – Prices in GBP LSE Datastream – Data up to 30.09.2025

The above chart shows UK large cap companies (black bars) annual returns alongside the largest declines within each year (red dots) since 1986. It highlights a powerful lesson: short-term market drops are common, but long-term results are often positive. Even though the market experienced an average intra-year drop of around 15%, it still finished positive in 27 out of 39 years. In other words, despite regular pullbacks, investors who stayed invested through the volatility were rewarded most of the time.

Market declines are often a normal part of investing – not a signal to exit. The key is to stay focused on long-term goals, rather than reacting to short-term market noise. History shows that patience and discipline often lead to better outcomes than trying to time the market.

This is why you will see little activity in periods of market distress from Bowmore, like in March and April this year but higher activity once we have seen them recover. This year we saw the second fastest decline on record (2008 being the sharpest) followed by most developed markets entering bull territory with 20% + gains post the April low points.

Our activity in late May and June was significantly above average as we have moved assets towards Asia from America and focused on well-established higher dividend paying companies with more reliable cash flows.  In the UK, 43% of the largest 350 companies were buying back their own shares, which helps to support share price further.

It is common to assume all investments rise and fall together but generally they all react to different economic focus.  In distressed times they may all fall, but in the longer term their behaviour and prices will be driven as below:

Bowmore Portfolios

Bowmore will always run diversified portfolios to help mitigate downward movements, and our job is to ignore the headlines and newspapers (bad news sells as they say) but to focus on our research and evidence-based investing.

The results come through not in one month or one year but over multiple periods with our aim to beat our peer group benchmarks by small amounts each quarter. We typically hold between 7 and 13 different ‘risks’ and whilst US equities have driven returns over the last 18 months with the AI super cycle; this year we have seen all sectors produce strong investment returns.  We continue to feel that the days of the US market producing excess returns over other equity markets are over and hence why we are ensuring that we remain well diversified and plan to continue to reduce US equity as and when market movements and risk tolerance allow.

Making sure your money outpaces inflation is critical to maintaining your spending power in a world that is seemingly more expensive year on year.

Source: AlphaTerminal, data as at 10/10/2025

The value of your investments can go down as well as up, so you could get back less than you invested. Past performance is not a guide to future performance.