Historical and forecast annual returns

I read an interesting article about historical and future investment returns from the Weekend Australian Financial Review (15-16 October 2011).

Based on ANZ research, the best performing asset class over the next 10 years will be Australian shares (as measured by the S&P/ASX200) with an expected annual return of about 8.0%. This is less than the 8.9% annual return achieved over the past 24 years as the chart below shows.

The chart also shows the best annual return of 12% achieved over the past 24 years was for residential property. However, over the next 10 years the expected annual return for residential property is about 5.1%. Commercial property is expected to do better than residential property, with an expected annual return over the next 10 years of about 5.8%.

My comments: The above articles highlights that Australian shares have been and are expected to continue to be a solid long term investment.

Important Information

The above information provides an overview or summary only and it shouldn’t be considered a comprehensive statement on any matter or relied upon as such. The above information doesn’t take into account your personal objectives, financial situation or needs. It’s important for you to consider these matters before making any financial decision and I recommend you seek help from a financial adviser.