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Looking past the fog of the sharemarket

Like much of Sydney this morning, my commute was interrupted by the beautiful fog that descended on our city, and it’s allowed me to coin the phrase “the fog of the sharemarket.” This phrase came to me this morning whilst walking to work from the Queen Victoria Building, as the fog was all around me but all I could see was the sharemarket!

In walking to Wynyard station, I passed hundreds of people shuffling to work (most were looking down at their iPhone) whilst I was captivated by the businesses I was passing: Country Road, Commonwealth Bank of Australia, Priceline, JB HiFi, Telstra, McDonalds, Apple, Coles, IAG, OPSM, ANZ Bank, National Australia Bank, Bank West, Westpac, Woolworths, Coca Cola, TAB and American Express.

The sharemarket is often described as a volatile, risky and impersonal place, when the reality is that it’s a living, breathing marketplace full of fantastic businesses employing millions of people and serving us each and every day.

A portfolio of Australian and International George Street brands has delivered returns of over 27%pa for the past 10 years.

It got me thinking (Jeff says that sometimes that’s dangerous) and more than a little intrigued, so I created a George Street Brands portfolio on our system, and invested an amount of $100,000 spread equally across these businesses in May 2003. The outcome is quite incredible – if I had made no changes to the portfolio for ten years, the portfolio of George Street businesses would have grown from $100,000 to over $610,000. With dividends reinvested and corporate action participation this figure would be closer to $765,000, a rate of return of almost 27%pa for the past 10 years. Not a bad outcome for getting off the bus early, taking action and staying the course!

What I hope you take from reading this is that the sharemarket really isn’t that scary, it’s a place where we go to invest in the businesses that we see and use everyday – that is if we can see past the fog of the sharemarket generated by the media, and aren’t looking at our iPhones.

It’s my job to work as my client’s financial ‘lifesaver’ to ensure that they swim between the flags and that they don’t get in over their heads.