A great year in the markets.
Monday, August 09, 2021
Scott: Welcome to the IMFG investment update. My name is Scott Douglas, I'm a director at IMFG. Today, I have with me, Dr. Steve Garth. It's been an amazing year in investment markets. And we thought we'd just share some of the insights that Steve has around what's been happening.
Dr. Garth: Well, it has been a fantastic 12 months, Scott, up to the end of the financial year. In fact, it was the best financial year returns we've had in three decades, since 1987.
Now, you can see the long-run I'm showing here from 2009 up to 2021. You can see we're in one of the great boom market of all time. Scott, when we look at other markets around the world, both in the international markets and the emerging markets, they've also returned 27%, 29% respectively. For a hedged investor in international markets, that's a return close to 33%. So really strong returns across the marketplace.
Scott: This has been the shortest, sharpest recovery that we've had.
Dr. Garth: Yeah. That's right, Scott. It's only taken 14 months to recover from the highs just before the pandemic, to get back to those highs. And of course, the market giving you highs on June 30th as well.
For example, the GFC, and here we've got a chart going right back now for 30 years. And, of course, it's really dominated by the GFC that you mentioned. That was the biggest fall in the market since The Great Depression. Now, that took 10 years for an investor, if they had it invested at the peak, it would have taken 10 years before you got back to the peak. So, you can certainly see how quickly markets and economies have recovered. When you look at the long run, Scott, yeah, the GFC was bad. Took 10 years to recover from the very peak till it got back there. But the point is, if you're invested over the whole of that period, in fact, your returns have been 9.5% per annum.
If you think about that, you compound 9% or 10% per year, it leads to an awesome result for you over the long run, despite the trials and tribulations you're going to go through to get there. And it just shows you power of staying disciplined, not reacting to those market movements. Markets go up and markets do go down. Being diversified and being disciplined are the keys to a good investment outcome.
Scott: So those investors who've stuck to the course, who stayed to their investment strategy, focused on what their long-term outcomes were meant to be and didn't make big changes when the dip came through last year. So we've had a great outcome, and I'd like to thank Steve for sharing those insights with us. And, thank you as clients of IMFG for sticking the course and working with us.
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