If you're going to be a stock picker then one of your goals has to be to beat the market.  It must be, otherwise why would you bother with all the extra work?  And if you're out to beat the market then it makes sense to check each potential investment against the market to see which is best.

The FTSE 100 is a great investment

Just to recap, the FTSE 100 (via an ETF or index fund) is a pretty fantastic investment to start with since it always pays a dividend, the earnings almost always trend upwards over the longer term and it's virtually certain to be around when you retire so the risk of losing all your money is almost zero.  Many studies have shown that for UK investments it's almost impossible to beat over the long term.

Why pick AstraZeneca?

Astrazeneca (LON:AZN) has been scoring very well on my screens for a while so it was due a review and I'm also looking to buy something as well.  It's a very large, globally diverse company and it's in the FTSE 100 anyway, so it's not like we're comparing the FTSE 100 with some crazy micro-cap start up.  It's a big, stable company with tens of thousands of employees earning billions in revenue and profit.  The gap between the FTSE 100 and AstraZeneca is about as small a gap as you're likely to get between an index and a single company so the comparison is fair I think.

Checking past performance

Both have more than 10 years of positive earnings with no losses and no periods without a dividend, so both have good stable histories. Over that last decade the FTSE 100 has grown earnings at about 7% while AstraZeneca has managed about 12%.  Dividends have increased for both at sustainable levels with the dividends covered more than 2 times in each case. The FTSE 100 has managed to return almost 10% on retained earnings while AstraZeneca has managed over 20%.  Retained earnings are that bit of the earnings that management has kept back (they are your earnings since you are the shareholder and owner) and invested them within the company.  Since it's your money you should want it re-invested at the highest rate possible. In summary, AstraZeneca has had better earnings growth than…

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