If there were such a thing as a received wisdom for investors, it would include the belief that equities always beat bonds as investment vehicles and that emerging markets offer better returns than those found in the big established markets. Two new studies question both of these assertions and suggest the case for re-examining some basic investment assumptions. Let's start with bonds. Researchers at Deutsche Bank have looked at the performance of government bond markets since 1962 and found that three countries in the G7 group of leading industrialised nations issued bonds giving higher returns than those of parallel equity markets. By far the worst performance by equities and the best by bonds came from the Italian market, which on an annualised basis saw stocks return an average negative 0.38 per cent, whereas bonds delivered a 2.64 per cent return. Bonds performed even better in Germany during this period, delivering a 4.28 per cent return, while stocks managed only an average 3.46 per cent annual gain. Figures for Japan are similar, with bonds delivering 4.17 per cent and stocks 2.72 per cent. Meanwhile, and more predictably, the four other G7 nations in this study saw equities easily outperform bonds. British government debt performed best among the G7 sovereign bonds, followed by the US, Canada and France - in that order. So it is hardly axiomatic that bonds (which are supposed to offer lower returns and lower risk than equities) will always end up yielding less than equities. This may be, as Deutsche Bank acknowledges, because of the particular circumstances in which these three nations all suffered hyperinflation in the period under review. It also suggests that another of investors' sacred cows, that markets operate efficiently in the long run, may also be flawed. Meanwhile, an even longer-term study of the relative performance of bond and equity markets by the London Business School, with data trailing to 1950, shows that in 19 developed nations, including Italy, Japan and Germany, equities ended up performing better than bonds. And it should not be forgotten that the Deutsche Bank study also demonstrates that in nations such as Britain and the United States, where Hong Kong investors are more likely to buy bonds, returns from their stock markets have comfortably overtaken those of the bond market. But should people be investing in these developed stock markets? The fashionable view is that stock prices follow economic growth, and so it is wise to weigh investments heavily in favour of markets where the underlying economy is growing at the fastest pace. Such a strategy has not done well given the emerging markets' performance so far this year, but many would argue that, in the longer term, emerging markets offer far better prospects. Researchers at Cambridge University's Judge Business School beg to differ, offering evidence from a recent paper looking at longer-term returns over a 10-year period from 1988. They found emerging markets outperformed developed markets on a total return and risk-adjusted basis over three- and five-year periods, but did so only 27 per cent of the time over 10 years. It may be argued that this relatively poor performance of emerging markets reflects the peculiarities of the decade under review. However, it is precisely during this period that the newer markets were coming into their own and gaining the attention of international investors. At the moment, emerging markets are trading at a cheaper level than developed markets, according to a note from Philip Poole, the global head of investment strategy for HSBC Global Asset Management. But he points out that the difference in valuations between the two sets of markets has narrowed since 2004. Emerging markets, in common with all equity markets, are in the doldrums right now, but in the 2000-10 period, their performance was astonishing. Figures from Bloomberg show Russia topping the performance list with a 23.4 per cent annualised average return on shares, followed closely by Indonesia at 20.4 per cent. In comparison, returns from the Chinese market were relatively modest at 10.5 per cent, trailing India at 15.6 per cent. Looking in the rear-view mirror while travelling forwards is not always the best means of judging future performance, but it adds perspective. At the moment, with markets crumbling in every direction, anything that adds to understanding is worthwhile.