LONDON -- If the long-run return on the market is 9.4% (as researchers at Credit Suisse say), investing in shares should be a no-brainer. Somehow, however, all too often our portfolios don't seem to reflect that attractive performance.

This is partly because that 9.4% number is an average derived from 100 years of data. Picking various time periods within that 100 years gives very different outcomes -- and the market almost never actually returns 9.4% in any single year.

Needless to say, unless you're holding a market tracker, your portfolio could have dramatically different results than what the market experiences. If you own a disproportionate amount of winning shares, your returns could be significantly better than the market. On the other hand...

In this series of articles, I'm looking at how individual shares have performed against the FTSE 100 (INDEX: ^FTSE) during the past 10 years. Today, I'm assessing global telecoms group Vodafone (VOD 0.12%) (VOD 0.12%).

During the last decade, Vodafone's performance has slightly outperformed that of the FTSE 100, generating annualized returns of 8.4% against the index's 8% return (these return calculations assume dividends were reinvested).

Of course, the share price is one thing, valuation is another. So how has Vodafone compared on a valuation basis over the years?

Vodafone started the last decade as a bit of a growth stock with a P/E ratio near 22, but that has come down over time to settle at around 10-11 for the past few years. Over the past decade, Vodafone has had an average P/E ratio of 13.8 -- not far off the FTSE 100's average of 13.7.

The past 10 years have not been a smooth ride for Vodafone shareholders.

The shares dramatically underperformed the market from late 2002 to the middle of 2006 before recovering nicely -- until the markets started their long slide into the financial crisis.

Then Vodafone moved nearly in tandem with the market as it recovered through to early 2011. And during a strong run from September 2011 to August 2012, Vodafone shares provided a 31% return while the FTSE 100 struggled with "just" 18%.

Since then, Vodafone's shares have plunged 16% as concerns mounted about its European operations and its ability to maintain the dividend without the help of payouts from its unpredictable U.S. joint venture, Verizon Wireless.

Vodafone has gone through a significant transformation in the eyes of investors during the past decade. Once the company's presence in rapidly growing emerging markets appealed to growth investors, but as mobile phones proliferated (global mobile penetration is now more than 90%) this growth story has faded and Vodafone has become more of an income/utility play.

We can see this change through the yield on Vodafone's shares. Since 2002, Vodafone's yield has grown from 1.1% to nearly 7% according to current forecasts.

In this framework, the stability of Vodafone's cash flow becomes important so investors need to ask themselves if they think the company's global footprint can help offset the troubles the company is seeing in Spain, Italy, and other parts of Europe. Will the Cable & Wireless Worldwide acquisition provide enough corporate-customer growth to reverse the declining revenues from traditional phone lines? Will Verizon Wireless start to co-operate and provide a hefty, predictable stream of cash flow?

If you think so, Vodafone's shares appear attractive on a historical as well as an income basis.

Large caps for the long run
If you don't agree or you already own Vodafone, you may also wish to consider the eight large caps spotlighted in "Super-Investor Neil Woodford's Favourite Blue Chips" for your portfolio. You see, this exclusive Fool report evaluates the FTSE shares the legendary index-trouncing investor is backing today, and the investing logic behind them.

You can read all about the potential long-run winners Woodford currently favors by clicking here to download the exclusive report today -- it's free!