Equities no longer a fast track to wealth
Since 1900 Australian equities have arguably been the best performing of all the stock markets around the world.
The risk premium, the return in excess of the real bill rate, has averaged 6.5 per cent a year over that entire period.
That compares with a 5.3 per cent outcome by the economic success story of that era, the United States.
The figures come from the Credit Suisse Global Investment Returns Year Book published last week.
The raw data it carries is fascinating in itself, but much more interesting and valuable are the implications that are teased out by Elroy Dimson, Paul Marsh and Mike Staunton from the London Business School (LBS).
Basically, the story is that as far as investing is concerned we have moved into a low-return world.
Read the full article: Equities no longer a fast track to wealth (AFR subscription required)