The Australian equity market has returned an average of 13.2% per year from 1900 to 2021 according to the updated chart from MarketIndex. This return denotes total return – that is with dividends reinvested. Another fact to be pointed out is in the past 122 years, positive return years outperformed the number of years when returns were negative. This shows the importance of long-term investing and time in the market.

During the Global Financial Crisis (GFC) in 2008 the market declined by over 40%. However since then there were only 2 years with negative returns.

The following graphic shows the historical annual returns of Australian stocks from 1990 thru 2021:

Click to enlarge

Source: MarketIndex

Notes:

• The returns shown above are total returns (i.e. share price returns + dividends)
• The returns shown are in the local currency
• The returns are for the All Ordinaries Index

Related ETF:

• iShares MSCI Australia ETF (EWA)

Download:

• Australian Sharemarket – 122 Years of Historical Returns : 2022 Edition (in pdf)

See Also:

• The Historical Average Annual Returns of Australian Stock Market From 1900 To 2019

Disclosure: No Positions

Westpac Banking Corporation’s ADR facility has been terminated by the depository BNY Mellon. ADR holders should automatically receive the cash proceeds($14.48 per ADR) in their accounts according to a notice posted by BNY Mellon. Full details are shown below:

Click to enlarge

Source: BNY Mellon 

Earlier:

• Westpac Voluntarily Delisted ADRs From NYSE

Disclosure: Long WEBNF

One of the strategies that goes with diversification and patience is periodic investing. To put it another way, regular contributions into equity accounts and buying stocks can earn excellent returns over the long-term as measured in years. This is because with regular investing, an investor is able to pick up stocks on the cheap when markets are down. Not only that but the investor is able to accumulate more stocks for the same monthly investment in a portfolio. Of course, when markets are soaring equity prices will be higher and the investor will buy less of the same share for the same amount. This process is called dollar-cost averaging.

But over time, due to the effect of compounding the overall portfolio can generate great returns as shown in the Australian example below.

Before we get to that, below is an excerpt on the concept of “dollar cost averaging” from an article at Capital Group:

One way to avoid futile attempts to time the market is with dollar cost averaging, where a fixed amount of money is invested at regular intervals, regardless of market ups and downs. This approach creates a strategy in which more shares are purchased at lower prices and fewer shares are purchased at higher prices. Over time investors pay less, on average, per share. Regular investing does not ensure a profit or protect against loss. Investors should consider their willingness to keep investing when share prices are declining.

Retirement plans, to which investors make automatic contributions with every paycheck, are a prime example of dollar cost averaging.

Source: How to handle market declines, Capital Group

The following chart from Vanguard Australia shows the benefits of periodic investing:

Source: Vanguard Australia

Related ETFs:

• iShares MSCI Australia ETF (EWA)
• SPDR S&P 500 ETF (SPY)

Disclosure: No Positions

Diversification and patience are two of the free and simple strategies for success with equity investing. Patience requires  not only holding stocks when the market is soaring but also the ability to withstand during dramatic and painful declines. Diversification on the other hand is easier to follow and implement with one’s portfolio. It is always wise to hold a variety of different assets across regions or countries than to won a concentrated basket of stocks.

The following chart from Vanguard Australia shows the power of  diversification over the 30 years from 1992 to 2021:

Click to enlarge

Source: Vanguard Australia

Australian equities were the top performers in just 3 out of those 30 years. The chart clearly shows no asset earned the best return year after year year consistently.

Related ETF:

• iShares MSCI Australia ETF (EWA)

Disclosure: No Positions