Returns over the past five years

We so often ask ourselves “What if?” What if I had chosen a different career? What if I moved to Aus? What if I had never gotten this puppy? And sometimes we ask ourselves “What if I invested in something else?”

So let us look at the 5-year returns for a random list of investments you could have made, and then do some quiet reflection. If we start with the worst investment in this random list, it would have been Chinese equities with a 7% per annum loss. It must be said that the big slide started two years ago, after the Hong Kong protests and the government crackdown on the tech sector.

The second worst 5-year return was Germany, and Europe in general, with 5.8% p.a. The European policymakers are just not pro-business, and slow to react to financial upsets. Japan is next, with 6.37% p.a. What can we say? An ageing population and little or no GDP growth. And next we have our own All Share index with 6.8% p.a. return. If you had bought Euros five years ago your currency appreciation would have been 6.87% and silver would have given you 8% p.a.

Gold did pretty well over the last five years and would have given you 9.48% p.a. Remember that with any investment priced in US$ – such as silver, gold, and international shares, bonds and cash – you have to add the currency fluctuation to the dollar return. So your 5-year rand return on gold would have been closer to 21% p.a. The S&P500 gave you 9.7% p.a. and then we have our good old rand/dollar exchange rate, with the rand weakening 11% p.a. against the dollar. So, had you bought some dollars with your rands five years ago and just stashed them in your safe, you would have outperformed almost all the asset classes out there!

The top-performing two on this random list would be Nasdaq with a 12.65% p.a. return in dollars in second place; and the winner by a huge margin would be Bitcoin with a 50% p.a. return. But before you rush out to buy Bitcoin, remember that it also gave you the biggest drawdown. From the top in November 2021 at $65 000, it went all the way down to around $15 600 this year. So if you can stomach a 316% loss, then go ahead!

We use cookies to improve your experience on our website. By continuing to browse, you agree to our use of cookies