13
November
2009
We are hearing a lot about the "lost decade" for investors covering the period April 1999 to March 2009 and much of this seems to be driven by the performance of the Stock market in the United States.
In April 1999 the Dow Jones Industrial Average stood at 10,000 and in October 2008 it again stood at 10,000 suggesting that investors have made no money at all over the last 10 years or so.
At GoldCore we do not advocate an investment approach based on picking a single investment or asset class and we therefore asked the question how would a balanced investor have fared over the worst 10 year period from April 1999 to March 2009?
The following graph shows the performance of the S&P 500 April 1999 to March 2009. Over this period an investor would have lost around 3%pa leaving them down a little over 26% for the 10 years.
How did a balanced investor perform?
As can be seen in the chart below, the average annual return for the GoldCore Balanced Portfolio was 3.94%pa net of advice fees and annual fund management charges over the 10 years to March 2009. The chart shows this performance compared to German Three Month Money Market accounts, Eagle Star Balanced Managed Fund, MSCI World Index and MSCI Ireland Index.
The conclusion we reach is that for a diversified investor with a risk appropriate portfolio of mostly low cost passive index funds, the last 10 years was not a lost decade.
Click on the image below for a larger view
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