Did you know Australian shares returned an average of 10% per year between January 1970 and August 2015?
Did you also know US shares returned 11.5% per year?
Indeed, $10,000 invested in US shares in January 1970 would be worth $1.41 million today, according to Vanguard.
Unfortunately, it seems around 11.5 million Australians can't take a hint.
According to the 2014 share ownership study conducted by ASX Ltd (ASX: ASX), just 36% of adult Australians owned listed investments such as shares — down from almost 40% in 2000.
Worse still, just 5% of the population owned international shares.
But if the message wasn't clear enough, consider:
- Australians who invested directly in shares (through a company, SMSF or individual portfolio) in the 2014 financial year had an average portfolio value of $112,522
- Australian shares returned 17.6% between July 1, 2013, and June 30, 2014, according to Vanguard; and
- Cash investments returned just 2.7% over the same period.
And that's just the average.
A share investment in household names like Commonwealth Bank of Australia (ASX: CBA) and Telstra Corporation Ltd (ASX: TLS) fared better than the market's average return.
In other words, 64% of Australians are missing out on significant opportunities by ignoring the sharemarket.
Pleasingly, 55% of direct investors believed the only way to succeed in the sharemarket was over the long term. Further, investors typically start buying shares in their late 20's or 30's.
Unfortunately, men (38%) are still more likely to own shares than women (27%), and of the direct sharemarket investors 57% are male.
Foolish takeaway
Australians perform relatively well by international standards when it comes to share ownership, but we could do far better. A greater focus on financial education should become mandatory in secondary schools.
It should also focus on practical examples of successful investing over the long term, rather than the dry theory-based curriculum currently being taught by universities around the country.
From my personal experience, I know too many Australians are missing out on the opportunity to set themselves up for financial success by ignoring their finances until it's too late.
