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Three Straight Years of Good Returns for Diversified Investors: How Long Will it Last?

The investment planning industry has had three great years. In Perth and across Australia, the past financial year produced a third consecutive year of “solid returns for investors,” according to AMP Capital Chief Economist, Dr Shane Oliver. Dr Oliver projects returns to “slow” in the coming year, but still provide “reasonable” returns. *

He attributes this to steady share evaluations and an economy growing fast enough to be healthy but slow enough to stem inflation. Here’s why.*

Three Straight Years of Good Returns for Diversified Investors

The Overall Outlook

Diversified investors who “moved beyond cash” saw solid returns. The average of superannuation fund performance was 9.9%, marking three consecutive financial years of growth at 9.9% or over. *

International equities ($A) provided a 25% return on investment (ROI). Australian listed property provided 20% ROI; global listed property returned 10%; international equities (Local) returned 9% and direct property returned 8%. Australian equities, Australian bonds and global bonds all returned 6%. Cash investments had the lowest ROI at 2.6%.*

There were a host of international concerns, such as the economies of China and Greece apparently threatening to collapse, geopolitical problems in the Ukraine, the ISIS terror threat and possible degradation of the US dollar. This was combined with concerns about how the Australian economy will fare now that the mining “boom” is “officially” over.*

However, there were also plenty of factors that were positive for us in the last financial year. The US has kept their cash interest target rate at a record low 0-0.25%, while “monetary easing” was reported in Japan, China and Europe. Our own rate cuts and a lowering of the A$ has helped the non-mining segment of our economy pick up.*

When you put it all together, it spells another projected year of good returns for well-managed investment portfolios.*

The Right Advice Can Make All the Difference

At Approved Financial Planners, we have more than 80 years’ combined experience in the field of investment planning. To learn more, call our Perth area office today: 08 6462 0888.

*AMP Capital: “The investment outlook–can the good returns continue?” Dr Shane Oliver.
http://www.ampcapital.com.au/article-detail?alias=/olivers-insights/july-2015/the-investment-outlook-%E2%80%93-can-the-good-returns-cont