It is possible to get a long term average of 10% while...

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stephenp

285 Posts.

05/02/22

11:34

Post #: 59375958
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Originally posted by Chris1690: ↑

Hi Navb,

According to that respected economist, John Williams of shadowstats.com., the actual inflation rate in the U.S., based upon the early 1980's formula, is about 15%. Apparently the Americans altered the formula at that time to obtain a more favourable result.

Who knows how high inflation actually is here in Australia?

Is it wise to expose 60% to the ravages of inflation and real negative interest rates?

It's an indictment of the super industry that they do not provide the option of physical gold. Gold does not pay interest or dividends, but it is a store of value.

I sold all my privately owned shares some time ago, exchanging the proceeds for gold and silver, stored at the site of a reputable bullion dealer.

This month I'll be shifting my super balance to an account based pension; I'm proposing to put it in the high growth option which has less exposure to cash and fixed interest.

Keep in mind, that if an investment nets 10% each year, the principle will double every 7.2 years, based upon this formula: 72 divided by the percentage return.

And so, the more the principle doubles early on, the greater the returns in the final years.

Please tread carefully; "Measure twice and cut once."

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It is possible to get a long term average of 10% while protecting capital. It will involve higher risk. My long term average annual return over the last 10 years is around 9% with a portfolio that is weighted towards growth.

Right at the moment though, it is quite defensive. If there is not a substantial correction in the next 6 months I will probably grit my teeth and return to my tried and tested strategy.
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