SPECIALS
The Queen Mother

By The Motley Fool Staff
April 2, 2002

In light of the Queen Mother passing away over the weekend it seemed appropriate to re-publish this article from August 2000 celebrating both her life and her 100th birthday.

It is 100 years ago today that the Queen Mother was born. What an achievement! To get to 100 and be apparently still in charge of your faculties is an amazing feat and one that more and more people are managing to achieve. On this special occasion, I thought I would dedicate this Fool's Eye View to looking at how Foolish the Queen Mum -- or rather her parents -- could have been 100 years ago, turning £100 into £2 million.

I am sure that the Queen Mum is actually a millionaire anyway; after all, she started life with the proverbial silver spoon in her mouth, and she married very well... but imagine if on the 4th August 1900 her parents had taken £100 and invested it in a broad range of shares representative of the stock market as a whole, and reinvested any dividends received. What would have happened? By 1999 it would have been worth over £2 million! Let's see how this would have happened:

1900 -- Lady Elizabeth Bowes-Lyon is born, and her parents invest £100 in the stock market. Being very clever and very shrewd they manage to invest in a way that avoids their daughter ever having to pay income or capital gains taxes. Remember, this is a fictional account of the Queen Mum's financial life; real people have to pay taxes, and real people invest to be able to spend at some point!

1901 -- In 1901, Queen Victoria dies and is succeeded on the throne by Edward VII. Marconi makes his first transatlantic airwave transmission of a message in Morse code. The stock market did not perform well; the Queen Mum's £100 is now worth £98.

1902 -- The Boer war ends, and Britain is secure, with an empire that spreads all around the globe -- the largest empire the world has ever known. Prime Minister Arthur Balfour's Education Act of 1902 abolishes the School Boards and places primary, technical and secondary education under the control of local authorities. This helps to create an "education ladder" by which abler children were able to win scholarships to enter the secondary grammar schools. The stock market recovered a little and the Queen Mum's investment is now worth £104.

1903 -- The first powered, manned flight takes place at Kitty Hawk in the USA; the founding of the Women's Social and Political Union intensifies the campaign for women's suffrage; and the Queen Mother's investment falls back to be worth just £100.

1904 -- The Russo-Japanese War begins, and Britain enters into the Entente Cordiale with France. The stock market booms, and the Queen Mum's investments are now worth £109.

1905 -- The first motor buses are seen in London, the Piccadilly and Bakerloo tube lines open and Einstein presents a paper on Electrodynamics of Moving Bodies. The Queen Mum's portfolio is now worth £115.

1906 -- The Liberals win the General Election and embark on a series of social reforms, such as medical examinations for school children, free meals for the poorest students and a programme for slum clearance. An earthquake levels San Francisco, the Labour party is formed and the Queen Mum's portfolio grows to £118.

1907 - A quiet year for news! The portfolio falls in value to £115.

1908 -- Asquith becomes Prime Minister, and the stock market falls; the portfolio is now worth £112.

1909 - Old age pensions are introduced for the first time, Count Zeppelin's airship flies 850 miles in thirty-seven hours, and the portfolio grows to £116.

1910 -- John Arthur Johnson, a black Texan, the son of an American slave, becomes the undisputed heavyweight champion of the world. Edward VII dies and George V becomes King, and the stock market grows at its fastest rate since the start of the new century. The Queen Mum's portfolio is now worth £130.

1911 -- The year is marked by the worst industrial unrest in Britain's history. Nationwide strikes of dockworkers, railwaymen and miners bring the country to a standstill. The National Insurance Act is passed to ensure that the worker, the employer and the Government all contribute to a general fund to pay for free medical treatment, sick pay, disability and maternity benefits. It also introduces a measure of unemployment benefit and free meals for school children. The stock market boom continues, and the portfolio has grown to £144.

1912 -- Scott reaches the South Pole and the Titanic sinks on her maiden voyage when she hits an iceberg. The Queen Mum's portfolio breathes a sigh of relief that she is not invested in the White Star Line and her portfolio is now worth £152.

1913 -- The Trade Union Act is passed, and the stock market continues its upward march, the Queen Mum is now worth £164.

1914 -- Archduke Franz Ferdinand, heir to the Austro-Hungarian throne, and the Princess of Hohenberg, his wife, are shot dead by a student in Sarajevo, Serbia. They are killed on their annual visit to the annexed provinces of Bosnia and Herzegovina. One month later Austria-Hungary declares war on Serbia. And the German decision to invade France through neutral Belgium leads to the British declaration of war on Germany. Despite this, the Queen Mum's portfolio falls only slightly to £157.

1915 -- A Wartime coalition government is formed, and Winston Churchill resigns. A German U-boat sinks the Lusitania, and poison gas is used in warfare for the first time. The portfolio is now worth £160.

1916 -- Tanks are used by the British for the first time, Lloyd George becomes Prime Minister and the Easter Rising occurs in Dublin. The rising lasts for several days before the leaders surrender to British forces. A total of fifteen nationalist leaders are subsequently executed, and some 3,000 interned. None of this stops the Queen Mother's portfolio rising to £169.

1917 -- The Americans enter the war, the Russian Empire collapses in a communist revolution, and the value of the portfolio falls to £160.

1918 -- The RAF is formed, just in time to see the end of the war. In total an estimated 10,000,000 lives have been lost, of which some 750,000 were British. Twice that number were wounded. The participation of British women in the war effort -- in factories and the armed services as well as in the home -- is recognised, and women over the age of thirty are given the right to vote. The stock market booms and the portfolio grows to a record £185.

1919 -- The Treaty of Versailles is signed with Germany. Its harsh terms, insisted upon by the French and Lloyd George, would prove to be the source of enormous bitterness in Germany. The Amritsar Massacre boosts Indian nationalism, Lady Astor becomes the first female MP, and the stock market boom continues, increasing by 42% in just one year. The Queen Mum's portfolio benefits and grows to £263.

1920 -- The League of Nations is formed, and rioters from Sinn Fein kill 109 policemen in Ireland. The boom in the stock market is over, with a fall in the year of 24%, and the Queen Mum's portfolio falls to £200.

1921 -- The Irish Free State is formed, although six counties in the north remain part of the United Kingdom. In the middle of the year over 2,000,000 people are unemployed and strikes are on the increase. The portfolio falls to £197.

1922 -- The Lloyd George coalition government collapses and the country's economic crisis continues to worsen. Bonar Law becomes Prime Minister, and the Labour Party becomes the formal Opposition. Mussolini becomes Prime Minister of Italy and Stalin becomes Soviet leader. Explorer Howard Carter, sponsored by his benefactor Lord Caernarfon, discovers the tomb of King Tutankhamen. The stock market is booming, and the Queen Mother's portfolio is now worth £295.

1923 -- Lady Bowes-Lyon marries Prince Albert, second son of George V. She is said to have been unimpressed at the idea of being a princess and turned him down twice before finally accepting. They wed in Westminster Abbey on April 26, 1923. Her portfolio continues to climb and is now worth £330.

1924 -- First Labour government, Lenin dies, and the stock market continues to boom. The Queen Mum's portfolio is now worth a record £402.

1925 -- The Gold Standard is agreed, and the Queen Mum's portfolio now reaches £530.

1926 -- The Duchess of York (as she became on her marriage) becomes a mother for the first time in 1926, giving birth to her daughter Elizabeth. In support of a strike by coal miners over the issue of threatened wage cuts, the Trades Union Congress calls a General Strike. The strike only involves certain key industrial sectors (docks, electricity, gas, railways) but, in the face of well-organised government emergency measures and lack of real public support, it collapses after nine days. The miners continue to strike but return to work in August, accepting lower wages and longer hours. The portfolio is now worth £545.

1927 -- The British Broadcasting Corporation is formed; Lindbergh flies non-stop across the Atlantic in the Spirit of St. Louis; and the Trade Disputes Act is passed, restricting the ability of workers to strike. The Queen Mum now begins to think that she is the world's best investor as her portfolio grows to £642.

1928 -- Women over the age of 21 are given the vote, Alexander Fleming discovers penicillin, and the stock market continues to rise. The Queen Mother is now worth £775; now she knows for sure that she can't lose by investing in the stock market.

1929 -- The stock market crash! Millions is wiped off stock market values overnight. Does the Queen Mum panic? Of course not! By the end of the year the stock market has recovered to show a fall on the year of just 12.2% The Queen Mother's portfolio falls to £681.

1930 -- The Simon Commission publishes its report on India, and the pressure for Indian independence continues. The stock market continues to suffer and falls a further 11.6%; the Great Depression begins, and unemployment in America begins to rise sharply. The Queen Mum's portfolio is now worth just £601.

1931 -- The Labour government resigns and is replaced by a Conservative-dominated National Government. Unemployment in the UK and USA continues to rise, and the stock market continues to fall. The Queen Mum's portfolio falls to just £508; she has lost £267 in just three years, and she doubts the wisdom of investing.

1932 -- In Britain, unemployment peaks at just below 3 million, in the USA it hits 12 million. Oswald Mosley, capitalising on the unrest caused by the Depression, forms the British Union of Fascists, and the King makes the first Royal Christmas broadcast. The 20-month-old son of all-American hero Charles Lindbergh is kidnapped from his nursery in the Lindbergh country home. The Lindberghs' baby was found murdered in New Jersey on May 12, 1932. A carpenter, Bruno Richard Hauptmann, is tried for the crime in 1935 and receives a death sentence. The stock market returns to boom times and grows by over 32%; the Queen Mother breathes a sigh of relief and chants the long term buy and hold mantra again as her portfolio reaches £687.

1933 -- Hitler becomes German Chancellor, and Roosevelt becomes US President. Prohibition in the US ends and the stock market celebrates. The Queen Mum's portfolio continues to grow and reaches a record £902.

1934 -- A quiet year at last! But not for the stock market; the portfolio reaches £1,122, having increased by a factor of 10 in 34 years.

1935 -- Unemployment in Britain begins to fall, radar is invented, confidence rises, and the stock market continues to boom. The Queen Mum's portfolio is now worth £1,279.

1936 -- George V dies, Edward VIII becomes King but abdicates to be with Mrs Simpson. George VI becomes King, and the Queen Mother becomes the Queen! She continues to bask in an ever-rising portfolio, now worth £1,522.

1937 -- Chamberlain becomes Prime Minister; Britain is rearming, and the threat of war looms. The stock market develops jitters and the Queen Mum's portfolio falls to £1,327.

1938 -- In September the Prime Minister, Neville Chamberlain, meets German Chancellor Adolf Hitler in Munich to settle the future of the Sudetenland. Hitler demands that this Czechoslovak land be ceded to Germany. Black boxer Joe Louis defeats Germany's Max Schmeling. The threat of war causes the stock market to fall further, and the portfolio is now worth £1,192.

1939 -- World War 2 starts when Britain and France declare war on Germany after Hitler refuses to abort his invasion of Poland. The stock market holds its nerve, and the Queen Mum's portfolio grows to £1,217.

1940 -- Britain's darkest days. Churchill becomes Prime Minister, rationing is introduced, the expeditionary force is evacuated from Dunkirk and the Battle of Britain begins. The Queen Mum's portfolio falls to £1,162.

1941 -- Hitler extends the war to the East by invading the Soviet Union. The war further escalates on 7 December 1941 when America declares war on the Japanese after they bomb the American naval base at Pearl Harbour. The entry of America to the war gives a boost to the stock market, which soars 22%, and the Queen Mum's portfolio rises to £1,428.

1942 -- Britain fights the Germans and the Italians in North Africa for control of the Eastern Mediterranean, oil and the Suez Canal. The Queen Mum's portfolio now reaches a record £1,682.

1943 -- Soviet Union troops win a fantastic victory at Stalingrad, killing more than 140,000 German troops. As the prospect of victory looms the portfolio rises to £1,875.

1944 -- On 6 June 1944, a second Western front opens with the invasion of Normandy -- D-Day -- and the Queen Mother's portfolio continues to look healthy finishing the year at £2,109.

1945 -- The war in Europe ends on 8 May 1945 when Admiral Doenitz surrenders (Hitler having committed suicide on 30 April). In August 1945 the Japanese surrender after atomic bombs are dropped on Hiroshima and Nagasaki. The losses of the Second World War were horrendous, with 60,000,000 dead. The Queen Mum's portfolio is now worth £2,233.

1946 -- Prosperity returns to the US and the depression is now long forgotten. The United Nations is formed, the National Health Service is created, the Labour Government nationalises the coal industry, and the Queen Mum basks in the glow of her ever-increasing portfolio, which is now worth £2,633.

1947 -- India becomes independent, the Labour Government nationalises the electricity industry, and the portfolio falls to £2,572.

1948 -- Gandhi is assassinated in India, and the state of Israel is created. The Queen Mother becomes a grandmother for the first time in 1948 when Prince Charles is born, and her portfolio falls to £2,474.

1949 -- Fear of Soviet domination of Europe induces the Americans to join with Britain, France, Italy and the Benelux countries in setting up the North Atlantic Treaty Organisation (NATO) for the defence of Europe. Chairman Mao Tse-tung proclaims founding of the People's Republic of China, the stock market falls again, and the Queen Mum's portfolio is now worth £2,331.

1950 -- War breaks out in Korea, and the stock market begins to recover. The Queen Mum's portfolio is now worth £2,585.

1951 -- The Labour government is defeated and Churchill becomes Prime Minister again. The Festival of Britain opens and prosperity begins to return. The Queen Mother's portfolio rises to £2,805.

1952 -- A very sad year for the Queen Mother; George VI dies. The USA explodes a hydrogen bomb, and Britain tests its own nuclear bomb. The stock market stagnates, and the Queen Mum's portfolio is worth £2,802.

1953 -- Queen Elizabeth is crowned. Stalin dies and Hilary and Tensing conquer Everest, and the stock market booms. The portfolio reaches £3,480.

1954 -- The stock market boom takes on a new momentum, up 48% in the year, and the Queen Mum's portfolio is now worth £5,147.

1955 -- Winston Churchill hands over to Eden as Prime Minister. The stock market boom continues, with a rise of 11%, and the Queen Mum is now worth £5,708.

1956 -- Britain joins France and Israel in an attempt to prevent Egyptian leader Nasser from nationalising the Suez Canal. The Suez Crisis triggers a sterling crisis, which forces the government to withdraw. The value of the portfolio falls to £5,194.

1957 -- Macmillan becomes Prime Minister, and the Treaty of Rome is signed by six European countries (France, the Federal Republic of Germany, Italy, Belgium, Luxembourg and the Netherlands) establishing the European Economic Community. The Queen Mother's original £100 is now worth £5,136.

1958 -- The European Economic Community (EEC) is formed. Britain booms, the stock market soars, and the Queen Mum's portfolio reaches £7,597.

1959 -- North Sea oil is discovered, the European Free Trade Area (consisting of seven members, including the Scandinavian countries and Switzerland and Britain) is formed as a counter to the EEC, and the Vietnam War begins. The stock market boom continues, with a record rise of 55% in the year. The Queen Mum's portfolio reaches £11,761.

1960 -- Cyprus and Nigeria become independent. The Queen Mum's portfolio grows slightly to £11,973.

1961 -- South Africa leaves the Commonwealth, JF Kennedy is elected US President, and the Berlin Wall separating east from west is built. The Queen Mum's portfolio grows to £12,176.

1962 -- The Soviet Union started to build medium range missile sites in Cuba, prompting the Cuban missile crisis. Harold Macmillan resigns as PM due to ill health, Sir Alec Douglas-Home becomes Prime Minister, and Marilyn Monroe dies. The Queen Mum is now worth £12,225.

1963 -- President Kennedy is assassinated in Dallas. De Gaulle refuses Britain entry to the EEC. Martin Luther King delivers his famous "I have a dream" speech. The Queen Mum's portfolio is now valued at £14,657.

1964 -- Harold Wilson becomes Prime Minister; America declares war on North Vietnam. The Queen Mum's portfolio falls slightly to £13,866.

1965 -- Sir Winston Churchill dies, Indian troops invade Pakistan and Ian Smith announces his Unilateral Declaration of Independence for Southern Rhodesia. The Beatles receive their MBEs, and the Queen Mum's portfolio reaches £15,447.

1966 -- The Chancellor, James Callaghan, announces a price freeze for twelve months and a pay and dividends freeze for six months. England win the World Cup, Indira Gandhi becomes Prime Minister of India. The Queen Mum's portfolio falls to £14,829.

1967 -- Israel goes to war against Egypt and Jordan. It captures the Sinai Desert to the Suez Canal, the Golan Heights, the West bank of the Jordan and Jerusalem. President de Gaulle once more vetoes Britain's attempt to open negotiations for Common Market membership, and the stock market booms. The Queen Mum's portfolio now reaches a record £19,915.

1968 -- Martin Luther King is assassinated, and Tony Hancock dies. Enoch Powell gives his famous "Rivers of Blood" speech opposing immigration, the London Gold Market shuts for two weeks because the economy is in such a desperate state, and yet again the stock market booms! The portfolio is now worth £29,494.

1969 -- Test bores in the North Sea find masses of oil off the shores of Scotland, Neil Armstrong walks on the moon, and Concorde makes her maiden flight. The Queen Mother's portfolio falls to £25,984.

1970 -- Edward Heath leads the Conservatives to victory in the General Election. Charles de Gaulle dies and England lose in the World Cup in Mexico. The portfolio falls to £25,075.

1971 -- Britain goes decimal, and Edward Heath negotiates Britain's future entry into the European Community. The stock market recovers and the portfolio soars to £36,735.

1972 -- Ireland, Denmark and the United Kingdom join the European Economic Community. The National Union of Mineworkers calls a national strike, bringing power cuts. The Government grants the miners a 20% pay rise. Other trade unions demand similar increases; Heath is forced to announce a 90-day freeze on wage increases and price increases. The Queen Mum's portfolio continues to grow, reaching £42,759 by the end of the year.

1973 -- The economic situation in Britain looks awful! Anthony Barber, the Chancellor of the Exchequer, announces a three-day week, and the stock market crashes; by the end of the year the portfolio has lost 28% of its value to £30,786.

1974 -- Two general elections are called, and Labour wins both of them. Inflation spirals out of control, and wages are linked to prices. Richard Nixon resigns as president of the USA, and the stock market crashes again. At the end of the year the Queen Mum's portfolio has fallen to just £15,362, a level last seen in 1965; she has lost over 60% of the value of her portfolio in just two years. Ouch!

1975 -- Margaret Thatcher becomes leader of the Conservative party; the referendum on membership of the EEC results in a Yes vote. The number of companies going bankrupt reached its highest ever level, but the stock market booms and booms, increasing by a staggering 149% in the year! The Queen Mum breathes a sigh of relief as her portfolio recovered to £38,297.

1976 -- Wilson resigns and James Callaghan becomes Prime Minister. Another sterling crisis looms, and the government has to go to the International Monetary Fund and borrow as much as it can. Bank rates and mortgages increase. Chairman Mao dies, the stock market takes a breather and the Queen Mum's portfolio increases slightly to £39,178.

1977 -- The Queen celebrates her silver jubilee. The films Star Wars, Jaws, Close Encounters Of The Third Kind, Saturday Night Fever and Rocky are all smash hits. Boom returns to the stock market with a 49% rise, and the Queen Mum's portfolio reached £58,258.

1978 -- Jimmy Carter, US President, negotiates a peace between Israel and Egypt, and Louise Brown the first "test tube baby" is born. The Queen Mum sees her shares grow in value to £63,268.

1979 -- Margaret Thatcher becomes Prime Minister, the IRA kills Lord Mountbatten, and the portfolio is now worth £70,544.

1980 -- Michael Foot is elected leader of the Labour Party and John Lennon is murdered. The stock market grows by 35% and the Queen Mum is now worth £95,093.

1981 -- Bobby Sands, the IRA hunger striker dies. The IRA renews its bombing campaign with Margaret Thatcher being the prime target. Ronald Reagan is elected President of the USA, and the Queen Mum's portfolio is now worth £108,026.

1982 -- Argentina invades the Falklands, Britain amasses an armada to take the islands back by force. Princess Grace of Monaco dies in a car crash, and the stock market boom continues. The Queen Mum's portfolio now reaches £138,921.

1983 -- Margaret Thatcher wins a landslide election victory, and the pound coin is introduced. Another booming year on the stock market takes the portfolio to £178,931.

1984 -- The miners go on strike, and the IRA blows up Margaret Thatcher's hotel. Another booming year on the stock market sees the Queen Mother's portfolio soar to £235,473.

1985 -- Mikhail Gorbachev becomes leader of the Soviet Union, and Live Aid raises £40 million for famine relief in Ethiopia. The Queen Mum is getting used to massive rises in her portfolio, which now stands at £283,039.

1986 -- A nuclear power station in Chernobyl blows up, Michael Heseltine resigns over the Westland affair, and an agreement to build a tunnel between Britain and France is signed. The Queen Mum is now starting to feel quite rich as her portfolio expands to £360,309.

1987 -- The south-east of England is hit by a great storm, and the financial markets have a storm of their own; on Black Monday the market loses 10% of its value. Despite this, the year ends with the stock market up 9%, and the Queen Mum sitting on a fortune of £391,656.

1988 -- A New York-bound jumbo jet carrying 258 Christmas travellers crashes in a Scottish village. And the Queen Mum sees her share portfolio grow to £436,696.

1989 -- The Berlin wall falls, and hundreds of Chinese demonstrators are killed in Tiananmen Square in Beijing. The Queen Mum's portfolio reaches £591,723.

1990 -- Margaret Thatcher, Britain's longest-serving Prime Minister, loses her battle for control of the Tory party, and John Major becomes Prime Minister. The portfolio falls a little to £534,917.

1991 -- In the Gulf, United Nations forces fight to eject Iraq from Kuwait. Helen Sharman becomes Britain's first astronaut, and the USSR breaks up. The Queen Mum's portfolio is now worth £646,180.

1992 -- The level of unemployment nears 3 million again, for the first time in 70 years. Britain pulls out of the European Exchange Rate mechanism, and interest rates fall. The Queen Mum's portfolio grows to £774,124.

1993 -- The EEC becomes the European Union, the EU. Labour leader John Smith dies of a heart attack and the booming stock market takes the Queen Mum's portfolio to almost the £1 million mark at £987,008.

1994 -- A TWA jumbo jet explodes over the Atlantic shortly after takeoff. All 230 people aboard are killed. The royal portfolio falls to £928,775.

1995 -- The United Nations is now 50 years old. And the Queen Mum is a millionaire! He portfolio is now worth £1,142,393; it has taken 95 years to turn £100 into £1 million.

1996 -- The Prince and Princess of Wales are divorced, Dolly the sheep is cloned, and the Queen Mum's portfolio powers on. It is now worth £1,324,033.

1997 -- The Labour party is elected with a landslide victory. The Princess of Wales is killed in a car crash, and the portfolio is now worth £1,636,505.

1998 -- The Fool starts in the UK; the Queen Mum is pleased! Her portfolio increases to £1,860,706.

1999 -- The value of the Queen Mother's portfolio breaks through £2 million. She starts to wonder about this long term buy and hold principle; when is she going to get the chance to spend some of it?

The aim of this article is to show that in the lifetime of one person -- the Queen Mother -- it has been possible, by investing in a balanced portfolio of stocks that mimic the performance of the stock market to turn £100 into £2 million. Of course in real life we Fools would have had tax to contend with, and none of us would have had the ability to invest the money and never, ever touch it. But I hope this demonstrates the power of the long-term investor, and how keeping your money invested at all times really does pay off -- in the long run!

The historical events listed here are taken from various sources including the BBC, and the Associated Press. The historic market returns are from the CSFB Equity Guilt Study.

This article, written by Nigel Roberts (NigelTMF), was orginally published in August 2000.