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East to West: The long game

By Colin Twiggs
March 17, 2017 2:00 a.m. EDT (5:00 p.m. AEDT)

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It pays to regularly step back from daily fluctuations that characterize short-term charts, to examine the big picture using monthly or even quarterly charts.

Over the last 20 years there is one clear winner when comparing major indexes. India.

Major Index Comparison over 20 Years

Even after adjusting for a weaker (INR) currency.

US Dollar compared to Indian Rupee and Chinese Yuan

Over the last 5 years, however, the DJ China 15 Index has outstripped the Dow Industrial Average and DJ India 15 when measured in US Dollars.

Dow Jones US, India & China in USD

But the picture changes when comparing ETFs based on broader-based indexes.

Dow Jones US, India & China in USD last 2 years

While volatility is a problem, growth in these two rapidly-expanding economies (India & China) should not be ignored if investing for the long run. Nor the absence of long-term growth in the UK, Europe and Japan.

In this age, which believes that there is a short cut to everything, the greatest lesson to be learned is that the most difficult way is, in the long run, the easiest.

~ Henry Miller

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Colin Twiggs is director of The Patient Investor Pty Ltd, an Authorised Representative (no. 1256439) of MoneySherpa Pty Limited which holds Australian Financial Services Licence No. 451289.

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