Blog | Investing tips

Australia’s secret economic weapon

by Tony Ryburn, Executive Chairman, Sharesight | Aug 13th 2008

Since 1990 Australia’s real economy has expanded by around 3.3% per annum. Few countries have been able to match this impressive performance.

Innumerable studies have examined the reasons for this remarkable growth. This is not surprising because other countries are eager to learn from Australia’s experience. And from Australia’s point of view it would be great to understand the reasons for this success to help ensure that it continues unabated.

Most of the studies talk about things like economic reform, increasing productivity, innovation and the increasing world demand for Australia’s extensive reserves of metals, minerals and fossil fuels. But all this stuff is pretty old-hat and you could be forgiven for wondering if there isn’t a bit more to it than that. Could it be that Australia has an economic weapon that is so secret that it is not mentioned in any of the economic studies? Either the answer is “yes” or else these studies have failed to uncover a key contributor to Australia’s economic success story.

You’ll think my coolabah tree has failed to keep the sun off my head if I say that Australia’s secret economic weapon is a romance. But it is true. It’s Australian’s love affair with their share market.

According to ASX’s 2006 share ownership study, 46% of Australians own shares. Although international data is scarce, you can bet your last dividend that few countries, if any, can come close to matching this remarkable performance. When it comes to investing in their share market Australians leave the rest of the world in the shade.

History shows that in the long run shares provide the best return so this romance with the share market creates a win/win/win. The 7.3 million Aussies and their families who own shares win. Australian companies also win because the high level of share investment provides the equity that helps fund the rapid growth that many of them achieve. And through this growth the Australian economy wins as well.

An equally remarkable fact from the ASX study is the DIY attitude Australians take to share investment. An amazing 6.0 million invest directly in shares and of those, 38% invest through an online discount broker and further 15% through a discount phone broker. This is where Sharesight comes into the picture.

Direct, DIY share market investors who invest online deserve a decent, online, portfolio management system. And that is exactly what Sharesight provides. Sharesight is comprehensive, easy to use, and requires minimal data entry. It automatically produces the true, annualised share returns and tax reports that ensure you pay the minimum amount of tax.

But don’t take my word for it; take a free trial. It could be the start of a beautiful new relationship.

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