Markets have always recovered strongly

by Andrew Newman
in Investing
2 Mar 2009 | 0 Comments

As the graph shows, for the first time in 35 years, the 3 year annualised return from the Australian sharemarket was negative for the 3 year period to the end of 2008. This is only the third time this situation has occurred in 100 years; with the previous two clusters of underperformance being 1973-4 and the 1930's Great Depression. After both these periods, the market produced significant gains.

While it is difficult to say when we will reach the market bottom or if we already have, it is possible to say that shares are inexpensive by all measures and investors need to be aware of the potential upside which has historically existed immediately following a market low.

The above article has been sourced from FIL Investment Management (Australia) Limited.

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Markets have always recovered strongly

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