A challenge to triumphant optimists? A new blue chips Index for the Paris stock-exchange (1854-2007)

Abstract : We have reconstructed a new blue chips (large caps) stock index for France from 1854 to 1998, based on a modern methodology. Our index differs profoundly from earlier indices, and is more consistent with French financial and economic history. We suggest this result casts some doubt on many historical stock indices, such as those used in Dimson, Marsh and Staunton's Triumph of the Optimists. Investment in French stocks provided a positive real return during the nineteenth century, but a negative one - because of inflation and wars - in the twentieth. Despite this secular negative real performance, stocks proved the best financial asset in the very long run, although with an equity premium lower than in the US.
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Submitted on : Tuesday, November 20, 2012 - 9:41:32 AM
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David Le Bris, Pierre-Cyrille Hautcoeur. A challenge to triumphant optimists? A new blue chips Index for the Paris stock-exchange (1854-2007). Financial History Review, Cambridge University Press (CUP), 2010, 17 (2), pp.141-183. ⟨10.1017/S096856501000003X⟩. ⟨halshs-00754455⟩

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