Ignore the siren's call and stay the course, finds Vanguard's 2019 Index Chart

Vanguard | 06 August 2019


Investment market return analysis from Vanguard Australia continues to demonstrate that discipline and diversification are integral factors for long-term investment success.

Vanguard's annual Index Chart – which plots the returns across key asset classes over the last 30 years – reveals that $10,000 invested in 1989 would have grown to $146,337, $105,787 and $80,382 as at 30 June 2019 if invested in Australian Shares, Australian Bonds and International Shares respectively. 

$10,000 invested in 1989 Investment value in 2019 Return per annum
Australian Shares $146,337 9.4%
International Shares $80,382 7.2%
US Shares $189,551 10.3%
Australian Bonds $105,787 8.2%
Listed Property $139,744 9.2%
Cash 51,896 5.6%
CPI (to June 2019) $21,534 2.6%

*Growth of $10,000 with no acquisition costs or taxes and all income reinvested.
Source: Andex and Vanguard

The chart reflects the long-held view of Vanguard founder, the late Jack Bogle, that "staying the course" and investing in a low-cost diversified portfolio are key investment principles for investment success.

"As the company reporting season kicks off, against a backdrop of index record highs on the ASX, investors will naturally consume the plethora of analyst commentary and insights that inevitably emerge every August and February," said Mr Robin Bowerman, Head of Corporate Affairs at Vanguard Australia.

"It would be tempting to make decisions based on the dominating themes arising from the analysis. However, it would be prudent for investors to recognise that most of the commentary is, rightly so, focussed on the last 12 months, which is a relatively short-term view.

"Investors would be wise to ignore the siren's call to react to short-term events or predictions and instead maintain a long-term perspective," he said.

The chart also serves as a reminder that a diversified portfolio helps ensure against exposure to the peaks and troughs of domestic and global markets economic conditions.

"The role of diversification in one's investment strategy is simple. It ultimately serves to deliver more consistent returns over time by reducing the risk of any individual holding, asset class or market," Mr Bowerman concluded.

In its 18th year, the chart has a long history as an educational resource that advisers use to assist clients in demonstrating the long-term performance of key market indices and showing the value of a long term, diversified investment strategy.


About Vanguard

With more than AUD $7.9 trillion in assets under management as of 30 June 2019, including more than AUD $1.5 trillion in ETFs, Vanguard is one of the world's largest global investment management companies. In Australia, Vanguard has been serving financial advisers, retail clients and institutional investors for more than 20 years.

Avi Tan
Senior Communications & Media Specialist
Vanguard Australia
+61 428 435 095

Francesca Marinucci
PR & Corporate Communications Specialist
Vanguard Australia
+61 413 559 766