Over the long term, shares have historically produced the highest average annual returns out of all the mainstream Australian asset classes. The average annual return from Australian shares over the last 50 years was 12.2% (note 1 )
Note 1: Vanguard Investments Australian Limited, Realistic expectations for share market returns, 2005, p 1.
. Thus, we conclude that shares should form an integral component of all investors’ wealth creation strategies. Broadly speaking, there are two ways to invest in the share market, either direct investment or indirectly through a managed fund or similar managed investment. Of course one may utilise a combination of direct and indirect investing in shares to achieve the desired exposure to the market.
We’ll cover some of the basic share market techniques and strategies before investigating how Dollar Cost Trading works and compares to other methodologies.