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Australian stock market still the best performing in the world

Published 12-MAR-2021 11:50 A.M.


1 minute read

Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.

In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.

The below articles were written under our previous business model. We have kept these articles online here for your reference.

Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.

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Just over a year ago, the nation was plunged into uncertainty as COVID-19 started to take hold, forcing almost everyone into lockdown and bringing on a technical recession.

Prior to this, the Australian economy had broken records for the longest uninterrupted economic growth in the developed world.

As a nation, we banded together and the economy is now booming with GDP growth in both the September and December quarters. With only a few weeks left in the current quarter we are set to make it three in a row.

The ABS statistics show that household and online spending is up, while the housing market is booming. Given this, you may be asking why with all this good news is the stock market not rising strongly.

Historically, since the low on our market following the 1987 crash, the All-Ordinaries Index increased at a rate of 0.52 points per day up to the all-time high achieved in February 2020.

Looking at the move up from the COVID-19 low in March 2020, we can break this past year into two parts.

In the first 22 weeks since the low, the Australian market rose at a rate of 12.59 points per day and in the 25 weeks since that point to the recent high on 17 February, it rose 4.78 points per day.

To put this into perspective, the rise out of the March 2020 low was around 30 per cent faster than the rise up from the March 2009 low following the GFC.

Given this, the All-Ordinaries Index is still moving quite fast despite the fact it is showing signs of slowing down.

In fact, a statistic that may shock some, the Australian market together with South Africa continue to be the best performing stocks markets in the world and have been for over 100 years.

Based on this, you have to wonder why so many are choosing to invest in the US market.

General Information Only

S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.

Conflicts of Interest Notice

S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.

Publication Notice and Disclaimer

The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.

Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.

This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.