Markets Work

Investment Advice Dubbo & Orana

Traditional active investment managers strive to beat the market – they rarely succeed. Studies have shown less than 10% of active investment managers consistently outperform the market and when their fees are taken into account that figure falls to less than 1%.

Markets throughout the world have a history of rewarding investors for the capital they provide. Allocating funds to the sections of a market that offer long-term risk and return characteristics is shown to be the most successful way to capture market returns.

So the question is: why continually try and outwit the market when it exists to work for you?

This chart compares the returns delivered by the US share market over a 20-year period, against the returns of the average equity investor.


As you can see, there’s a significant difference between market returns and what the average investor achieves. And there are pointed reasons why the average investor continues to deny themselves those higher market returns:

  • Paying high fees
  • Focussing on pre-tax returns
  • Trying to time the market
  • Failing to diversify
  • Chasing last year’s winner

123 years of Australian share market returns illustrate if an investor picks and sticks with a strategy that works with the market, their patience will be rewarded.

Australian Sharemarket 123 Year History & Annual Distribution: Historical returns are based on the All-Ordinaries Accumulation Index which includes dividends. April 2000 – Present: S&P/ASX All Ordinaries Index (Total Return), Source: S&P. January 1980 – March 2000: ASX All Ordinaries Accumulation Index, Source: ASX. Data from 1900 – 1979 supplied by AXA/AMP is constituted using regional indices with different methodologies to record share price index movements. Returns in AUD. Copyright 2022 S&P Dow Jones Indices LLC, a division of S&P Global. All rights reserved.


At Foundation Wealth Planners we work with the market and focus on what we can control.

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