From Mary Holm’s column in the NZ Herald last weekend- here is the history of the best and worst returns from sharemarkets over the last 30 years.
The clear advantage of this is diversification. As our table shows, when one stock market is not performing well, that will usually be offset by another market.
There are some years, such as 2008, when there’s no good news anywhere. But look what happened the following year – with Japan’s respectable 9 per cent performance the worst of the pack.
A couple of other things to note about the table – which includes all the big sharemarkets plus Australia and New Zealand:
• New Zealand recorded the best returns in the early 1980s, and among the ugliest worst returns in the 1987 crash. This suggests that our market might be more volatile than many others – at least back then.
• Sometimes a country stays “best” or “worst” for two or three years. But then we find a country switching from one extreme to the other, such as India from 2008 to 2009 and the Australia/China swap from 2003 to 2004. There’s no predicting sharemarket trends.