How returns can lead us astray

There’s a table you’ve probably seen on just about every investment platform known to humanity. It shows recent returns history and looks something like this: Cumulative performance Investment1-year (%)5-year (%)10-year (%)All Stocks gilts5-24-0.8 Nominal cumulative total returns 2015-2025. Data from JST Macrohistory 1, FTSE Russell, and British Government Securities Database 2. May 2026. This kind of data is so ubiquitous it’s only natural to believe it must be helpful. For example, it enables you to make quick fire comparisons over what seems like quite a long period of time: Investment1-year (%)5-year (%)10-year (%)All Stocks gilts5-24-0.8Money market4.316.919.5 The conclusion looks obvious in this case. Gilts (UK government bonds) have been a disaster. Cash has quietly ticked along. If you want a defensive diversifier to offset equity risk, then the numbers speak for themselves. Except they don’t. They’re only telling you something about the recent past. Given the way we’re wired,…