Don't be fooled by average returns - it's compound returns that count!
A few clients this week have asked me if it’s a good idea to invest a large sum in the share market at the moment (for a variety of reasons e.g. as super contributions, a gearing strategy and so on). I told these clients that I have some real concerns with it – not because I don’t have faith in the stock market – but because of the difference between actual versus compound returns.As these charts demonstrate, the US and Australian stock markets are close to their peaks since the GFC hit nearly a decade ago. Whilst I’m cautious of not falling into the trap of trying to predict how the market…
The skinny
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