Stocks to Finish in the Black...Just
The penultimate ASX trade for 2015 saw share markets close in the red and down by around ~1 percent reversing much of the previous day's gains (the market closes early today at 1410 hrs).
Despite a rally at the end of the year, the ASX benchmark index closed only 1.2 percent higher for the calendar year to date.
No doubt this will be used as ammunition for more "doom and gloom" headlines!
However such pieces are often deliberately disingenuous.
The plain facts are that the XJO (ASX 200) closed at 5416, thus generating returns on an accumulation basis (inclusive of dividend returns) of a solid if not spectacular 6.8 percent for the calendar year so far.
This means that any managed superannuation fund worth its salt in 2015 will have recorded another positive year, adding further to record total Australian household wealth.
Beneficiaries from the "quest for yield" this year have included Telstra (TLS) which recently hit a 13.5 year high breaching $6/share, and the major banks.
5 year returns for superannuation balances should also be solid despite the dip experienced by many global share market indices through a wobbly 2011.
Record Household Wealth in 2014
The good news for Australian households is that this will push aggregate household wealth to new record levels at the end of 2014.
The Q3 2014 Household Finance and Wealth figures (analysed here) already showed that household balance sheets retained a record net worth of $7,718 billion, a massive 51 increase on the financial crisis lows of March 2009 ($5,107 billion).
Even in per capita adjusted terms, these represent very impressive gains.
The purple "net worth" line shows how household wealth had been increasing at an unsustainable quarterly pace of a massive 2.7 percent in the 8 years leading up to the financial crisis, miles ahead of the 1.8 percent pace seen 1994-2000.
A correction through 2008 put the upwards trajectory back onto a more sustainable course.
Interestingly the growth in household wealth in recent times has not all been driven by house prices, contrary to what the popular media might have us believe.
Further, the ratio of household debt to assets has declined moderately since peaking in March 2009, which is good to see.
Read more here.