It's obvious.
Australia is one of the best places to invest your money. The only surprise is, just how long it's taken the government to work out just how good we've actually got it.
From franking credits on dividends – a benefit of most Australian blue-chip stocks – to self-managed superannuation accounts (SMSFs) and a stable regulatory environment. It's fair to say we've got it good.
With the Australian stock market returning an average of 12% per annum since 1900, it's hard to think that so many Australian investors still don't have enough to retire comfortably.
But with the power of hindsight, we can see how, more recently, so many Australian investors beat the market. For example, over the past five years, the S&P/ASX 200 Index (ASX: XJO) (INDEX: ^AXJO) is up a whopping 43% but Telstra Corporation Ltd (ASX: TLS) shareholders have enjoyed a 99% return and those who bought National Australia Bank Ltd. (ASX: NAB) shares post-GFC have enjoyed an 89% return – mostly in the form of fully franked dividends.
Woolworths Limited (ASX: WOW) and BHP Billiton Limited (ASX: BHP) are sitting on gains of 59% and 33%, respectively.
So what's my point?
Australia's stock market is a powerful beast.
However you've got to be in it to win it and Australian retirees who've got more than 10 years until they hang up their boots need to think long and hard before ignoring our local exchange.
We have so many more legal advantages over our international peers that it's no wonder why we've been, according to Credit Suisse, the lucky country over the past century.
The best dividend stocks for your retirement
As this article on moveavtor.com highlighted, we've had the best performing stock market of any, since 1900. In fact $1 invested in 1900 would've transformed into over $395,000 today if we reinvested!
However if you're considering buying into yesterday's winners – such as Telstra, NAB, BHP Billiton and Woolworths – in anticipation of similar results, I encourage you to think twice about their valuations and remember, we don't drive our investment vehicle looking through the rear-view mirror.
Instead, you should focus on finding small-cap stocks which will be tomorrow's biggest and best companies. For example, our top analyst recently found one ASX stock with a 7% grossed-up dividend yield, I'm strongly considering buying today and holding for many years, before any of the above blue-chip stocks.
