Australian shares give best returns
Australian shares have outperformed residential investment property to deliver the best after-tax returns over the past two decades, according to the latest Russell Investments/ASX Long-Term Investing report.
Now in its twelfth year, the report aims to provide investors with insight into how different investments have performed over the medium to long term, taking into consideration the impact of tax, costs and borrowing on returns.
The 2010 report found that Australian shares outperformed all other investment sectors to deliver the best after-tax and after-cost returns at the lowest and highest marginal tax rates across a twenty-year period to 31 December, 2009.
However, figures for the same period on a before-tax and after-cost basis show the residential investment property sector marginally outperformed all other sectors, coming in at 9.8 per cent per annum while Australian shares returned 9.7 per cent per annum.
Stanley Yeo, senior investment consultant for Russell, said the findings illustrate “the importance of choosing an appropriate strategy for your financial circumstances and adopting a longer term perspective”.
“Not attempting to time the markets ensures investors can participate in and take advantage of these sharp market rallies,” he added.
The report also found that superannuation remains the most tax-effective way for Australians to invest.
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