Tuesday, August 30, 2022

Long term asset class returns

This chart is from an interesting article in The New Daily, an Australian newspaper which was started by union super funds to counter the pernicious influence of the Murdoch Press.


Note that this is the total return, i.e., includes rents and dividends.  If you own your own house, you would obviously not get a rent return, but on the other hand, you would have saved yourself the rent you would have paid.  Note that the returns for less risky/less volatile investments, such as bonds and cash are over the long term much lower than from the riskier/more volatile investments.  Also, observe that the returns over these 96 years for residential property and shares are practically identical, but there are long periods, sometimes decades long, when they diverge.  Finally, the chart is drawn using a log scale. 


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