The Power of Compounding: An Australian Example

Albert Einstein said “Compound interest is the eighth wonder of the world”. Compounding of interest over many years will lead to multiplication of the original principal or capital many times. The following example shows the power of compounding for various Australian asset classes: Click to enlarge   Source: Five great charts on investing, AMP Capital From the above article: …

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The Economy of Australia: Infographic

Some of the important facts of the economy of Australia is shown in the infographic below. The top three destinations for Australian exports are China, Japan and the US. The top three exports are Iron Ore, Coal and Education. The presence of the education sector as one of the largest exports is surprising. Though Australian universities are attracting …

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On The Composition Of Australian S&P/ASX 200 Index

The benchmark index of the Australian equity market is the S&P/ASX 200 Index. It measures the performance of the 200 largest stocks listed on the Australian Stock Exchange (ASX) by float-adjusted market capitalization. Since Australia is a commodity-based economy, resources form the largest sector in the index. After natural resources, the highest number of companies …

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The Historical Average Annual Returns of Australian Stock Market Since 1900

Australia is one of the top-performing equity market especially in the long run. As a developed country Australia offers many of the advantages of a typical developed market such as transparency and the rule of law. Investors looking to diversify by holding international stocks should consider Aussie stocks. This is because not only they have …

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Comparing the Performance of Australian vs. Global Stocks

Australian stocks have rebounded sharply in the past few months as commodity markets have recovered. In terms of equity market performance since the Global Financial Crisis of 2008-09 thru last year, Australian stocks have under-performed the US market as measured by the S&P 500 index as shown in the chart below: Click to enlarge   …

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Household Savings Rate: U.S. vs. Australia

The savings rate in Australia is much higher than the U.S. rate. In the U.S., the Personal Saving Rate stood at just 6.0% as of October, 2016. This rate is the same as the household savings rate in Australia. Click to enlarge U.S. Personal Saving Rate: Source: Federal Reserve of St.Louis In the 60s and 70s, …

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