Account balances decline 14.4 per cent
Want to know how hard the average retail investor has been hit by the market decline over the past 12 months? According to the Perennial Investors Index, the average growth investor’s account balance has declined by 14.4 per cent.
Perennial released its index this week and pointed out that despite this dramatic decline, investors needed to remember that they were still in front over the longer term, with the average growth investor’s account balance up 8.1 per cent over the past five years.
Commenting on the index, Perennial head of retail funds management Brian Thomas said that over the past five years, an investor with a growth-oriented portfolio would have seen a $10,000 investment grow to $15,502 — well above the rate of inflation over the same period.
“Investors should still be happy with that outcome,” he said.
According to the Perennial Index, investors with an allocation to a conservative portfolio also felt the heat in the past financial year, but were much less exposed than those with a growth-oriented portfolio. Conservatively set portfolios would have declined by an average 2.3 per cent over the 12 months, albeit that over five years they would have increased by 5.9 per cent.
Thomas said it had certainly been a tough year, but that the best strategy at such times was to remain calm and to understand that a good quality diversified portfolio was well-placed to ride out the current volatility.
Recommended for you
Natixis Investment Managers has highlighted the top five questions that Australian financial advisers are hearing from their clients amid increasing economic uncertainty and volatility.
AFCA has urged financial advice firms that when recommending a product to clients where it receives any benefits, advisers must go beyond merely disclosing conflicts of interest.
Women still account for less than one-quarter of Australia’s financial advice profession, with only two firms with more than 100 advisers having 30 per cent female advisers.
Questions have been raised regarding the viability of the current Australian Financial Services licensing regime, and the role that licensees have to play in monitoring and supporting the profession.