The ASX 200 has been moving sideways for three-and-a-half years but dividends and franking credits mean investors are likely to have earned nearly 9 per cent a year.
, it is not only at the same level it was in May 2021 – so two years in the doldrums – it’s also at the same level as immediately before the COVID-19 correction of February 2020.But as anyone who’s been invested over that time knows – and the accompanying chart makes obvious – the Australian sharemarket has also been through some eye-popping gyrations; enough to test the patience of plenty of investors.
The rolling three-year return to early August has been 2.6 per cent, less than half the average, and it follows -0.1 per cent last year. In other words, while there are no guarantees about what will happen, history shows you can’t keep a good market down for ever. The US Volatility Index, referred to as the VIX, normally goes through a gradual decline from 19 to 17 between January to July, then rises sharply to peak at 22 by the beginning of October.
Also, before the pullback, the US market had risen 19 per cent between mid-March to the end of July, without a serious drop. The sheer weight of accumulated trading profits together with sentiment readings hitting extreme bullishness primed the market for a breather.But even the pullbacks we’ve had this year have been a bit doldrumy. The biggest drawdown for the ASX 200 so far has been 8 per cent, back in March.
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