What if you only invested at the worst times?


Meet Joan:

Every time Joan decides to invest it seems to be at the worst possible times.

In fact, in the last 30 years the Australian stock market has had 5 years of negative returns, and she has managed to invest right before each one.

It all started with a New Year’s Resolution on January 1, 1992 where Joan invested $10,000. The market returned -2% the next year.

She was a bit disappointed holding off putting money in in 2013. The market returned 45%!

This got her hopes back up, so Joan invested $10,000 on January 1, 1994. Again, the market fell after she invested, Joan’s investments dropping 9%.

Being disheartened Joan didn’t invest again for some time, however not wanting bad luck to go both ways, so she swore to never sell her investments.

On January 1, 2002, after seeing average returns of 13% over the last 7 years Joan finally got the courage to invest $10,000 again. The market fell 9%.

“Why Oh why?” Joan cried. “Why do I bother?!” She held off investing for another 5 years – the market had returned an average of 23% over this time, maybe her luck could change.

No, it was 2008, the GFC and the market plummeted 38%!

But wait! A rebound, the market bounced back 37% in 2009 – that following year! Waiting one more year she decided to invest again on January 1, 2011 putting in another $10,000. Sure enough, the market fell 11% this time.

It’s been over 7 years since Joan has last invested. Australian shares have been returning an average of 12.27% since Joan last put money in.

She is wondering if now is a good time?

The interesting thing about Joan’s investment journey is that despite investing at the 5 worst times in the last 26 years, she now has a portfolio of $258,840. Considering she has only ever invested $50,000, that is an average return of 15.47% per year.

Joan’s story is based off the real returns of the Australian stock market over the last 26 years (there has only ever been 5 years of negative return in 26 years). She only invested right before the market had negative returns, however because she held on and didn’t make rash decisions Joan has still built quite a nest egg for herself.

This is a clear example, that time in the market can make up for not being able to time the market.

If you have ever considered investing into the stock market, but the thought of it made you nervous – even if you had back luck like Joan, you could you still significantly grow your wealth over the long term.

If you would like to start your investment journey, and want some advice to do it properly, get in touch nathan@limefinancial.com.au

Investment data: S&P ASX200, returns based on 1st Jan-31st Dec in each year, assumes all dividends reinvested and does not take into account taxation. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, please get in touch. Any information is of a general nature only and has been provided without taking account of your objectives, financial situation or needs. Because of this, you should consider whether the information is appropriate in light of your particular objectives, financial situation and needs.Past performance is not a reliable indicator of future performance. This article provides an overview or summary only and it should not be considered a comprehensive statement on any matter or relied upon as such. This information does not take into account your personal objectives, financial situation or needs and so you should consider its appropriateness, having regard to your personal objectives, financial situation and needs having regard to these factors before acting on it. This article may contain material provided by third parties derived from sources believed to be accurate at its issue date. While such material is published with necessary permission, we do not accept any responsibility for the accuracy or completeness of, or endorse any such material. Except where contrary to law, we intend by this notice to exclude liability for this material.


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