The Historical Annual Total Returns of Australian Stocks From 1893 To 2021

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Stocks are the best asset class to own especially over the long-term. Equities not only provide superior returns but also help beat inflation. For income investors, well established high-quality companies can offer excellent dividends. Stocks outperforming other assets has been proven by studies in many major markets. In this post, let us take a look at the example of the Australian equity market.

The following chart shows the historical total annual returns of the Australian equities from 1893 thru 2021:

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Source: Three all-time best tables for every adviser and investor by Romano Sala Tenna, Katana Asset Management

The following is an excerpt from the above linked article:

Crashes are inevitable. Be ready and don’t panic at the bottom. In fact, the best time to panic is at the top.

Case in point. There has only been one (calendar) year in the 146-year history where the market fell by 30% or more, in 2008. But if you panicked and sold during that crash, you would have missed an extraordinary recovery. In 2009 the market was up by 39.6% and rose in 11 of the 13 years following the crash, including by 18.8% in 2012, 19.7% in 2013 and 24% in 2019.

Know thyself. If you are prone to doing the wrong thing at the wrong time, stay out of the stock market. Or work with a trusted financial adviser who can coach you through such periods.

As I mentioned in the introduction, the author also notes that the only way is up in the long-term. However in the short run markets can be volatile.

Earlier:

Related ETF:

  •  iShares MSCI Australia ETF (EWA)

Disclosure: No positions

Mexico vs. China – Top 10 Reasons To Nearshore Manufacturing: Infographic

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Mexico and China compete to attract foreign direct investment especially from US multinationals. While labor in China is much cheaper than in Mexico, Mexico has many advantages over China. For example, China’s labor practices are much to be desired to say least. A few years ago a spate suicides by workers at Foxconn, a contract manufacturer of Apple(AAPL) in China led to the installation of anti-jumping nets in factories. Incidents such as this are the known cases. Nobody knows what other slavery-like conditions exist there and hidden from the outside world. Another factor that ethical investors would consider is that China is a communist state with a one-party rule. So by having factories in China some multinationals indirectly support the single party regime. Mexico on the other hand is a democracy despite having its own issues such as the violence of the drug cartels and corruption.

While researching the advantages of Mexico over China for manufacturing I had saved the following infographic. Though it is a bit old many of the reasons noted still applies.

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Source: Co-Production International

Disclosure: No positions

India’s Sensex Sets Yet Another Record

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The Indian equity market has performed very well this year. The benchmark Sensex has shot up over 21% year-to-date. In the past five years the index has more than doubled. Today the index reached a new high of  58,459.70 before retreating.

Sensex year-to-date return:

Sensex 5-year return:

Source: Google Finance

Disclosure: No positions

Fact of the Day: Number of Job Applications Received by IBM

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IBM(IBM) used to be a great company to work for decades ago. That is no longer the case. These days the company is a yet another average tech shop that runs on its former glory. IBM had a total employee count of about 346,000 worldwide in 2020. The number of employees in the US remains a secret per Statista. As early as 2017, a NY Times article noted that the company had more employees in India than in the US.

Despite all this, IBM received 3 million applications in 2020 according to a recent WSJ piece.

It is indeed shocking that 3 million people want to work for a company that is a former shell of itself. Unlike the past when it was a pioneer in innovation, today it is mostly a “body shop” in tech parlance.

Disclosure: No Positions

The Newest UNESCO World Heritage Sites: Infographic

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UNESCO World Heritage Sites are sites of historic, cultural, scientific or other form of significance and are considered to be outstanding value to humanity according to Wikipedia. To be designated a world heritage site not only brings prestige but also gives a boost to tourism. at 58, Italy has the most number sites in the world with 58 sites. The US has 24 sites. The following shows the latest list of 34 sites that were added to the list.

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Source: Radio Free Europe/Radio Liberty