Patience pays off with equities – BlackRock Investment Institute Report

Equity volatility is nothing new, yet patient investors are usually rewarded for staying the course, according to the latest report from the BII.

The latest BlackRock Investment Institute (BII) commentary, “Risk and Resilience: Patterns in Equities Returns,” explores the inherent risks in equities, details drivers of equities returns and flags complexities such as correlations and the paradox of the outperformance of low volatility strategies.

The BlackRock report highlighted that equities have been volatile throughout history; that when it comes to equity investments, patience tends to pay off. Investors willing to hold equities for 10 years or more have a high chance of earning a positive real return; finally that dig beneath the surface to understand how inflation, interest rates, growth, currencies, correlations and volatility can affect returns in surprising ways.

The BII commentators, Russ Koesterich (pictured), BlackRock’s Global Chief Investment Strategist, Ewen Cameron Watt, BII Chief Investment Strategist, and Edward Fishwick, Co-Head of BlackRock’s Quantatative Analysis Group, advise investors to dig beneath the surface to understand how factors such as inflation, interest rates, economic growth, currencies, correlations and volatility can drive returns.

The report also explored the relationship between economic growth and equity returns, and reveals the bottom line is that while growth is good for equities, it is often priced in fast, and can negatively affect equity returns, depending on the time horizon, the type of growth signal and the interplay with related factors such as inflation.

Click here to read full report.


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