No cheer for share investors

If you’ve been investing in Australian shares over the past year you’ve probably had a pretty tough time. 

 With only a few days to go until the until of the 2015-16 financial Craig James and his fellow economists over at CommSec have done an accounting on where the money was made in the past 12 months .

And although Craig is pretty upbeat on how Australian investments have performed I feel the sharemarket has really disappointed. 

• The  total returns on Australian shares – that is the all ordinaries accumulation index – is looking like it will end the year just about dead flat. Craig does point out that the 20-year average is still up 10.8 per cent but it doesn’t help much if you self managed super fund went long at this time last year
• And it doesn’t make you feel any better if you compare it to Australia’s favourite investment vehicle – property – which returned plus 13.9 per cent while returns on boring  government bonds lifted 7.3 per cent.
• Craig’s takeaway is that all three of the major investment sectors were steady to higher over the year and the outlook for the economy i.e. growth, jobs and inflation is still positive as Australia transitions away from the mining boom aided by record low interest rates and a currency seemingly comfortable in the mid to low US70c range. 

     Let’s hope he’s right but I couldn’t help noticing in the breakdown on stock market sector performance it was the mid caps that did well (up 14 per cent). Among the 21 sector groups food  and beverages, (29 per cent) automobiles and components, (27 per cent) and pharmaceuticals and biotech (23 per cent) were the stars. The losers were naturally energy (down 27 per cent) followed by banks (18 per cent) and the materials sector (10 per cent).

 And when we say banks we really mean the Big Four Australian banks -Westpac, CBA, ANZ and NAB – and materials is basically BHP and Rio which are still struggling with low commodity prices. 

 So while most individual super investors did well in companies holding the line with dividends this year it definitely doesn’t look that good on the capital side and it’s hard to see what’s going to turn that around. 

And just for the record Commsec estimates the Australian stock market will finish the financial year in 24^th  place in a field of 73 global exchanges with only 18 bourses in positive territory.  Best performers include Latvia (up 41 per cent), Slovakia (21 per cent) and Hungary (up 20 per cent). Worst performers have been Greece (down 43 per cent), Russia (29 per cent) and Columbia (23 per cent). 

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