We believe that a successful investment strategy starts with an appropriate asset allocation. Most suitable for YOUR objective. The below chart reflects this in Investments / Shares / Vanguard’s latest annual index chart .

One of the key lessons of investing is still taking a long-term perspective.  As a result, investing in a range of broad market indices. We have seen over time, this gives investors a greater chance of investing success.


Viewing Investments / Shares / Vanguard’s latest annual index chart


EXAMPLE:  if you’d invested $10,000 in a single asset class three decades ago, where would you be now?

The ranking of each asset class does vary each year that we review these numbers. 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.

It is difficult for investors to pick out next year’s winners as individual asset classes do have bumpy rides. Given this, markets will often behave differently from each other. Sometimes greatly, sometimes marginally – at any given time.


What does Vanguard’s latest annual index chart tell us?

It’s an interesting question.

When you compare the growth in Investments / Shares / as shown in Vanguard’s latest annual index chart, investors can expect a smoother ride thanks to a much more diversified portfolio. Individual asset classes to a long-term investment with a balanced diversified fund (50/50 growth/income split) over a 20-year period, maintained a good return on investment in the portfolio.

In practice, diversification is a rigorously tested application of common sense.

You will see this in Vanguard’s latest annual index chart below. US shares performed best, yielding 10.6 per cent. While cash performed worst with just 6.1 per cent.

Okay, are you 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.

Take a look here. 

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Vanguard 2018 Index Chart

Our Perspective on Diversification

The table above shows the performance of various asset classes over the past 30 years.


RECAP  Investments / Shares / in Vanguard’s latest annual index chart

When deciding where to invest your money, it is important investors understand that the best and worst performing asset classes will often vary from one year to the next. As shown in the Investments / Shares / in Vanguard’s latest annual index chart above.

Having a diversified mix of investments across multiple asset classes can help smooth out returns over time. The table also reinforces the importance of sticking to an investment strategy and focusing on the long term. For example, the declining returns from international shares (hedged) in the 2016 financial year may have swayed investors to move out of this asset class in search of better returns elsewhere. In taking this option, investors would then have missed out on the 18.9% return in the 2017 financial year.

That given, history has shown us, our focus for investors are best served by broad diversification for long-term investment.


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