We look at the key trends in investment markets during 2017 and their impact on longer term diversified portfolio returns.
2017 was very much a “steady as she goes” year in most investment categories.
Australian and international shares both performed slightly better than long term average. Bond performance was below average, which is normal in times of good sharemarket performance.
Australian residential property continued on its 20 year path of well above average returns, although there are signs it may finally be starting to slow.
In contrast to previous years there was very little in the way of “tumultuous events” or “crises” impacting on short term market performance. Market volatility was relatively low during the year. As a result the pop finance media was somewhat starved of sensationalist material to feed excitable speculators. Much of this void ended up being filled by Bitcoin hype.
At ICT Wealth we don’t focus on short term returns in isolation, as they are too easily distorted by transient volatility. For growth oriented investors we believe 5 year rolling returns are more important.
After factoring in the impact of 2017, the 5 year rolling returns for most portfolios we recommend to clients were in the range of 8-12% pa, averaged over the 2013-2017 period. This was in line with other recent 5 year rolling periods.
As always, past performance is no guarantee of future returns.
If you would like to discuss your specific investment portfolio’s performance in more detail, please get in touch.