Invest
Morgan Stanley executive touts benefits of long-term equity investing
Investing in high-quality companies with sustainable returns can lead to strong long-term performance, according to a senior Morgan Stanley executive.
Morgan Stanley executive touts benefits of long-term equity investing
Investing in high-quality companies with sustainable returns can lead to strong long-term performance, according to a senior Morgan Stanley executive.
Bruno Paulson, managing director of Morgan Stanley Investment Management's International Equity team, said investing in well-managed companies with high returns on operating capital can outperform traditional equity indices over time.
"We're well-known advocates for a long-term approach to high quality investing," Mr Paulson said.
He highlighted the power of compound interest, noting that returns can grow dramatically over extended periods. An investment receiving 9% compound interest would double every eight years, significantly outpacing simple interest returns.
The Morgan Stanley team aims for companies in their global portfolios to compound at around 10% annually. Mr Paulson broke this down as:
- 5-6% reliable revenue growth across economic cycles
- 1% from incremental margin improvements
- 4% free cash flow yield
However, Mr Paulson expressed concern about the broader market's ability to match this compounding in challenging economic conditions.
"That is the worry right now, that after 15 years without a recession, barring the brief interregnum of COVID, trickier times may be on the way," he said.
Mr Paulson noted the shift in market focus from 2023's "Magnificent Seven" US stocks to what some are calling the "Fabulous Four" in 2024. He singled out Nvidia as the "Omnivorous One", with its stock price up 150% in the first half of 2024 and a market capitalisation of US$3.09 trillion.
Despite the challenging investment environment, Mr Paulson emphasized the importance of thinking long-term and avoiding permanent capital destruction.
"We want to avoid the permanent destruction of capital, which we would argue is just as important to investors as the chance to earn outsized investment returns," he said.
The Morgan Stanley team maintains that long-term investors benefit from investing in high-quality equities that can withstand market fluctuations over time.
RELATED ARTICLES
Investment insights
Gold’s new playbook: from safe haven to strategic reserve as prices hit records
Gold’s rally to record territory in 2025 is not a speculative sideshow—it is a structural signal. With central banks accelerating diversification away from US Treasuries, real yields easing, and ...Read more
Investment insights
Investors maintain positive sentiment amid geopolitical uncertainties
In a surprising show of resilience, investors maintained a positive outlook in September, according to the latest State Street Institutional Investor Indicators released by State Street MarketsRead more
Investment insights
Women in Finance Awards 2025: A leading indicator for talent, performance and regulatory readiness
A record 617 submissions and 236 finalists in this year’s Women in Finance Awards signal more than celebration—they’re a proxy measure of talent pipeline strength across Australia’s financial servicesRead more
Investment insights
Brokers turn complaints into gold by transforming compliance into strategy
Complaint volumes aren’t just rising — they’re getting harder, touching product suitability, vulnerable customers and data use. With brokers now originating the majority of Australian home loans, the ...Read more
Investment insights
Australia’s growth beat is real — but it’s running on the wrong engine
Australia’s June-quarter expansion surprised to the upside, powered by households and government even as public investment sagged. The composition matters: consumption rose faster than essentials, and ...Read more
Investment insights
Australia’s 5% deposit reboot: who wins, who pays, and what changes from 1 October
By pulling forward and widening the 5% Home Guarantee Scheme, Canberra has reset the entry point to home ownership — and the chessboard for banks, brokers, developers and insurers. The higher price ...Read more
Investment insights
Australian investors undeterred amidst global uncertainty, prioritise financial security, tech stocks, and tangible goals
In a world marked by economic fluctuations and geopolitical uncertainties, Australian investors are showing resilience and confidence, according to a recent survey by wealth app SharesiesRead more
Investment insights
Escaping the dollar trap how treasuries and bullion are reshaping portfolios
Gold’s geopolitical premium has broken out of the margins and into the mainstream of reserve and portfolio strategy. Central banks have been net buyers for years and, since 2022, their accumulation ...Read more
Investment insights
Gold’s new playbook: from safe haven to strategic reserve as prices hit records
Gold’s rally to record territory in 2025 is not a speculative sideshow—it is a structural signal. With central banks accelerating diversification away from US Treasuries, real yields easing, and ...Read more
Investment insights
Investors maintain positive sentiment amid geopolitical uncertainties
In a surprising show of resilience, investors maintained a positive outlook in September, according to the latest State Street Institutional Investor Indicators released by State Street MarketsRead more
Investment insights
Women in Finance Awards 2025: A leading indicator for talent, performance and regulatory readiness
A record 617 submissions and 236 finalists in this year’s Women in Finance Awards signal more than celebration—they’re a proxy measure of talent pipeline strength across Australia’s financial servicesRead more
Investment insights
Brokers turn complaints into gold by transforming compliance into strategy
Complaint volumes aren’t just rising — they’re getting harder, touching product suitability, vulnerable customers and data use. With brokers now originating the majority of Australian home loans, the ...Read more
Investment insights
Australia’s growth beat is real — but it’s running on the wrong engine
Australia’s June-quarter expansion surprised to the upside, powered by households and government even as public investment sagged. The composition matters: consumption rose faster than essentials, and ...Read more
Investment insights
Australia’s 5% deposit reboot: who wins, who pays, and what changes from 1 October
By pulling forward and widening the 5% Home Guarantee Scheme, Canberra has reset the entry point to home ownership — and the chessboard for banks, brokers, developers and insurers. The higher price ...Read more
Investment insights
Australian investors undeterred amidst global uncertainty, prioritise financial security, tech stocks, and tangible goals
In a world marked by economic fluctuations and geopolitical uncertainties, Australian investors are showing resilience and confidence, according to a recent survey by wealth app SharesiesRead more
Investment insights
Escaping the dollar trap how treasuries and bullion are reshaping portfolios
Gold’s geopolitical premium has broken out of the margins and into the mainstream of reserve and portfolio strategy. Central banks have been net buyers for years and, since 2022, their accumulation ...Read more
