Account balances decline 14.4 per cent
Want to know how hard the average retail investor has been hit by the market decline over the past 12 months? According to the Perennial Investors Index, the average growth investor’s account balance has declined by 14.4 per cent.
Perennial released its index this week and pointed out that despite this dramatic decline, investors needed to remember that they were still in front over the longer term, with the average growth investor’s account balance up 8.1 per cent over the past five years.
Commenting on the index, Perennial head of retail funds management Brian Thomas said that over the past five years, an investor with a growth-oriented portfolio would have seen a $10,000 investment grow to $15,502 — well above the rate of inflation over the same period.
“Investors should still be happy with that outcome,” he said.
According to the Perennial Index, investors with an allocation to a conservative portfolio also felt the heat in the past financial year, but were much less exposed than those with a growth-oriented portfolio. Conservatively set portfolios would have declined by an average 2.3 per cent over the 12 months, albeit that over five years they would have increased by 5.9 per cent.
Thomas said it had certainly been a tough year, but that the best strategy at such times was to remain calm and to understand that a good quality diversified portfolio was well-placed to ride out the current volatility.
AUTHOR
Mike Taylor
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