In these current uncertain times, investors are opting to leave more of their funds in cash rather than shares. However the fact remains that shares have out-performed all asset classes over the past 20 years. Since October 1991 total returns on Aussie shares have grown by 433 per cent or 22 per cent per annum.
Using data supplied by CBA Quant, CommSec has identified the best performing major stocks over the past 20 years. Head and shoulders above the rest of the pack has been Fortescue Metals Group with returns up a phenomenal 248,624 per cent over the past 20 years, or 12,431 per cent per annum.
Clearly Fortescue is an outlier. But of the current S&P/ASX50 companies, 28 have been listed consistently for the past 20 years. And none of the 28 companies have produced negative returns over the period. Forty-two of the current S&P/ASX50 companies have been consistently listed for the past decade and only 10 of the companies have produced negative total returns over the period.
While investors are currently favouring cash, it’s worth noting that If $100,000 had been invested in stocks at the end of 1990, it would have been worth $804,000 at the start of this year. The same $100,000 would have appreciated to just under $305,000. To read the full paper, click here.