Average is a Myth

The Australian stock market has averaged about a 11% annual return since 1980, but it's usually well above or below that mark in a given year. Understanding the range can help investors ride out the ups and downs.

Source - DFA Australia Limited

​Since 1980, the Australian stock market has rewarded investors with an annualised return of about 11%. But returns in any given year may be sky-high, extremely poor, or somewhere in between.

• Annual returns came within two percentage points of the market’s long-term average in just seven of the past 45 years.

• Yearly returns have ranged as high as up 67% and as low as down 39%.

​• Since 1980, annual returns have been positive 33 times and negative 12 times.

Understanding the range of potential outcomes can help you stick with a plan and ride out the inevitable ups and downs.

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