This is a hard thing to say, and I don’t do it lightly, but we may be at the point where you’d be better off investing anywhere but Australia.
That happens to have been true, on average, over the past 10 years and the past one year, with the ASX200 being the worst performing index among all the major developed economies over both long and short time frames, and normally you’d say something that’s been going on for 10 years is a chance to reverse.
Except I can’t see any reason to think that – in fact, the opposite is true. This is a great country, with some very fine businesses, but it keeps finding new ways to stuff up.
Two main reasons for this: government policy formation over the past decade and a half has been hopeless, partly because our current politicians are unusually shallow and opportunistic and partly because the Canberra bureaucracy has been de-skilled, and second, our investment system is holding companies back, especially at a time of massive technological change and disruption.
It’s not that the CEOs and boards are incompetent, although some fall into that category, it’s that dividend imputation and liquidity-addicted super funds don’t allow Australian companies to invest for the long term.