Australian shares a solid performer
Over the past 20 years, Australian shares have outperformed residential investment property and fixed interest, according to the latest Russell Investments/ASX Long-Term Investing Report.
Growth assets in general delivered superior returns compared to conservative investment options such as cash and fixed income over the 10 and 20 year periods to 31 December 2011, the report found.
The results showed that over the 20-year period, Australian shares returned 9 per cent per annum at the highest marginal tax rates and 7 per cent per annum at the lowest.
The report also found that residential property posted the second highest return over the same 20-year period, with 8.1 per cent per annum and 6.6 per cent annum at the lowest and highest marginal tax rate respectively.
Over the 10-year period, residential property may look to be a more appealing investment option as it outperformed all other asset classes, but Russell has warned that it is not without its risks.
Russell director of consulting and advisory services Greg Liddell said these risks related to relatively high valuations and the possibility of further deleveraging by Australian households.
According to Russell, with cash reporting the lowest returns under both tax regimes, it was likely that the next 10 would see continued low returns from cash.
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