Powered by MOMENTUM MEDIA
subscribe to our newsletter sign up

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

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.

Advertisement
Advertisement

“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.

What would you have if you invested $10,000 30 years ago?
nestegg logo
subscribe to our newsletter sign up
FROM THE WEB
Recommended by Spike Native Network
Dan Hadley JLB Adela... - Hi Ro,

Thanks for your question and it is actually quite a valid one. At present there are a number of companies working on flying car options. These.......
Lawrie - What happens when a payment is made by an employer prior to the 30th June (say 25th June this year) via a clearing house, but it takes the clearing.......
Dr Terry Dwyer, Dwye... - She is quite right of course. Returns to both capital and labour incomes are much reduced by taxation and it has increased enormously since the.......
Anonymous - A Bad call by the RBA. Lower interest will not stimulate the economy any more at 1.25% than at 1.5%, which was already too low. The imminent election.......