Invest
What would you have if you invested $10,000 30 years ago?
It’s an interesting question. If you’d invested $10,000 in a single asset class three decades ago, where would you be now?
What would you have if you invested $10,000 30 years ago?
It’s an interesting question. If you’d invested $10,000 in a single asset class three decades ago, where would you be now?
According to Vanguard’s latest annual index chart, US shares performed best, yielding 10.6 per cent, while cash performed worst with just 6.1 per cent.
However, these figures are only the start of the story, Vanguard head of corporate affairs Robin Bowerman said.
“One of the key lessons of this chart is that taking a long-term perspective and investing in a range of broad market indices gives investors a great chance of investing success,” he said.
“While it is tempting to focus on the top performing asset class, it does not provide much more than an interesting fact about a moment in time as, each year that we review these numbers, the ranking of each asset class varies.”
Mr Bowerman said individual asset classes will have bumpy rides, making it difficult for investors to pick out “next year’s winner”.
Given this, investors are best served by broad diversification for long-term investment.
“We believe that a successful investment strategy starts with an asset allocation suitable for its objective,” he explained.
“In practice, diversification is a rigorously tested application of common sense [given that] markets will often behave differently from each other – sometimes marginally, sometimes greatly – at any given time.
“When you compare the growth in individual asset classes to a long-term investment in a balanced diversified fund (50/50 growth/income split) over a 20-year period, investors can expect a smoother ride thanks to a much more diversified portfolio, while maintaining a good return on investment in the portfolio.”
Okay, I’m ready for the numbers!
|
$10,000 invested in 1988* |
Accumulated investment value at 30 June 2018 |
Percentage returns per annum |
| Australian shares |
$136,435 |
9.1% |
| International shares |
$84,798 |
7.4% |
| US shares |
$206,367 |
10.6% |
| Australian bonds |
$99,412 |
8.0% |
| Listed property |
$115,839 |
8.5% |
| Cash | $58,904 |
6.1% |
* Provided there were no acquisition costs or taxes and all income was reinvested.
RELATED ARTICLES
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
North platform adds household reporting feature to boost adviser efficiency
AMP's North platform has launched consolidated household reporting across multiple client accounts, helping financial advisers streamline their client review processes. Read more
Property
What Adds The Most Value To Properties?
Wondering how to up the value of your property? Properties are worth a lot of money in general, but there’s always a way to maximise value. The good news is that most of the things you can do to ...Read more
Property
Centuria reports strong growth in alternative real estate sectors for FY24
Centuria Capital Group has reported significant growth in alternative real estate sectors for the 2024 financial year, driving stable performance and increased guidance for FY25. Read more
Property
How to leverage equity in your home for investment or renovation
Home equity, the value of your property minus any debts owed, is a powerful financial resource many homeowners in Australia can utilize to further their financial goals. Whether you're looking to ...Read more
Property
Exploring REITs: Real estate investment without buying property
Real Estate Investment Trusts (REITs) offer a compelling investment alternative for those interested in the real estate market but may not want to endure the complexities and capital requirements of ...Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
