..you want to talk about Long term view, so let's talk about it.
..ASX has not performed anywhere close to Wall St, even though it has a strong influence on ASX.
Between Feb 2003 and Oct 2007, i.e in a span of just 4.5+ years, XJO moved from 2,800 to 6,754 for a gain of +141.21%. October 2007 marked the peak before XJO crashed by -50,48% to 3,344 in Feb 2009. By Feb 2009, XJO stood at just +19.4% relative to where it was in Feb 2003, so after the GFC crash, XJO delivered just +19.4% over 6 years or a paltry 3.23% pa on average.
In other words, a brilliant +141.21% over 4.5 yrs wiped out to 19.4% over 6 years!
So what happened from that GFC low was a grinding move higher. However since Feb 2009, XJO moved from 3,344 to 8,140 today or +143.42% over 15.5 years or on average +9.19% pa (lower on compound basis). That is at best as ASX could deliver after markets have reached overstretched valuation levels.
And if you take score from Feb2020 before the Covid crash, XJO moved from 7139 to 8,140 today which equates to just +14.02% over 4.5+ years or a terrible +3.1% pa average over that timeframe.
It is clear that XJO, despite all the re-calibration to remove underperformers and include new performers, did diddly squat compared to its eminent era prior to the onset of GFC.
We ask: what happened? Has ASX lost its way, or it has been a reflection of structural changes in our economy and the increasing mismanagement in our premier corporations?
With history showing a poor trend, the risk reward of Buy and Hold XJO long term isn't flash, as we saw how the brilliant moves of 2003-2007 got decimated with one big crisis. If the next crisis arrives and XJO suffers a similar -50% decline, we could be taken down to almost 4,000, which makes it at just +19.61% above its GFC lows of Feb 2009- 15.5 years later for an average 1.26% pa!!
