11.7%pa for 33 years
From 1941 to the low in 1974, the average annual compound return on the All Ordinaries Index for 33 years was 2.9 per cent per annum. Take off inflation of 4 per cent and you were going backwards. And that doesn't include 1929 to 1941, which would have pulled it even lower.
In the next 33 years from the 1974 low (yes I've picked my dates) to the 2007 high, the All Ordinaries Index delivered an average annual compound return of 11.7 per cent. Add in 4.3 per cent of dividends and you come up to 16 per cent, per annum, for 33 years.
Strewth. No wonder everyone learned to set and forget, no wonder no one ever asked questions about fees, no wonder people didn't notice the trails on equity products even though the recipient was driving a BMW and the end...Continue Reading