Equities or high interest bank deposits?

[alwaysonit]

Most people estimate that an index will rise 10% per year on average, going by past performance. Does this apply to all indexes? The history of the S+P 500 is long enough to average out, but can we assume a long term 10% growth in European and emerging market equities also?
Being a cautious risk taker, I’ve looked at bank accounts that pay high interest on hard currencies and also have a deposit insurance scheme in place. On the USD, Azerbaijan pays 9.8% on a 1 year deposit and has a $40k ish usd cap to the insurance scheme per bank. Mongolia pays 7% and has a $10k cap per bank for the insurance scheme. The negative point here is that the insurance scheme pays out in local currency which will likely be devalued at that point. Which investment is safer?

 

[Marc]

To my mind this is a bit like asking; "which is safer, going out on your own after dark in New York or Moscow?"

 

[dub_nerd]

Didn't you just ask exactly the same question about deposits on this other thread? Someone even went to the trouble of giving you the S&P credit ratings for the two countries you mentioned above. As for the stock index question, yes they grow in the long run but they have periodic setbacks and do badly in real terms in times of high inflation. What else can one say?

 

[Jim2007]

This is becoming tiresome, I doubt you will find anyone that will validate your desire to deposit your cash in Azerbaijan or Mongolia!

The general consensus for equity returns is more like 6% - 8% and about half the companies in the S&P 500 have a credit rating of at least an A, while most of the remainder are in the regions of at least BBB.

 

[Bronte]

Being a cautious risk taker,

, Azerbaijan pays 9.8%

Mongolia pays 7%

pays out in local currency which will likely be devalued at that point.

Which investment is safer?

Something drastically wrong here,

Cautious risk taker wants to know which is safer while referring to Azervaijan, Mongolia and devaluation