Let us now take a look at the ‘big picture ‘ for investment returns for varied asset sectors vs inflation during the last 70 years. This could give us a broad viewpoint on the right way to best employ our investment funds. I think it is prudent that every investor regardless of age or level of investment experience should diversify their investments between property, stocks and fixed income investments. The table below compares the long term return performance for Treasury Bills, Gold, Treasury Bonds, company bonds, home costs and common stocks.

Kind of Asset Class:

Treasury Bills: 30-Day Maturity

Treasury Notes: 5-Year Maturity

Home Prices: Home Price Appreciation (national average) *

Common Stocks: S&P 500 Stock Index Total Return with

dividends reinvested

Corporate Bonds: 20-Year Corporate bonds

Gold Price: London PM Fix

* Information Source: US Census Bureau and National Association of Realtors

This table reveals that the average annual rate of inflation over the 70-Year period was 4.0%. Treasury Bills produced a 4.1% yearly compounded return over the same period. After accounting for inflation, T-Bills only produced an annual ‘real ‘ return

of 0.1%. Despite the strong return performance for gold bars during the past several years, over the long run gold only produced a 1.1% annual real return after accounting for inflation. Although gold is generally considered a hedge against inflation, the 1.1% annual real return does not provide much of a return outside the inflationary rate. 5-Year Treasury Notes produced a 1.5% yearly real return, company bonds a 1.7% real return and home prices appreciated at a once a year rate of 2.1% after accounting for inflation.

Only stocks offer a suggestive return after accounting for inflation. The S&P 500 Index with dividends reinvested produced an inflation changed compounded yearly return of 6.8%. A $1,000 investment in the S&P 500 Index grew to $1,287,957 producing a 128,696% total return. Based mostly on this long term historical return data, only stocks offer a real rate of return after accounting for inflation. Home costs and gold are traditionally viewed as inflation hedges. However , the inflation adjusted yearly return for stocks of 6.8% was essentially more than three times greater than the inflation altered return of 2.1% for home costs.

This raises the question. Why are stocks the genuine performance winner compared with other asset classes and why do stocks supply the only important real return after accounting for inflation? In the following Chapter we're going to discover why stocks supply the best real return compared to all other investments.

Chuck hughes Invest in stocks

Let's now take a look at the reason stocks have provided the best investment returns over time. When you purchase a stock you become a partial owner of the company and own a percentage of the company. The value of your proportion of ownership is known as ’stockholder’s equity’. Stockholder’s equity is actually the net worth of a company and is worked out by taking away the debt of a company from its assets.

Stockholder’s Equity = Assets Minus Debt

If a company is liquidated then stockholder’s equity or net worth would compare to the split or liquidated value of a company after all debt is paid. When a company produces revenues and can retain those takings it increases its net worth. Retained earnings are typically the biggest element of net worth. When a company is able to grow its stockholder’s equity or net worth it creates economic value for its shareholders and makes a corporation's stock more valuable.

As the net worth of a company grows the company can increase its production or services. Banks can increase their loans. Insurance firms can write more policies. This increase in production or services can in turn create more earnings for the company. A corporation that is growing its net worth is making real wealth. Owning equity or stock in such a company is thought of as a ‘real ‘ investment.

This is different than buying real estate or expensive metals or collectibles with the hope that someone will pay you more than what you paid for it. This is price conjecture as there isn't any growth of net worth or equity with these kinds of investments.

Companies that produce and retain takings enable stocks to supply the best returns matched against all other sorts of investments.

The increase in stock holder’s equity or net worth of a company has always authorized stock financiers to enjoy the highest investment returns. As long as corporations continue to supply and retain takings, stock investing will always provide superior returns compared to all other types of investing.

My tangible trading experience and historic research demonstrates that there is a strong correlation between the growth of a corporation's net worth and the price appreciation of its stock. Historically the market price of a stock usually follows the growth of a corporation's net worth. If a company's net worth increases then usually the fair price of its stock also increases. If a company's net worth decreases then normally the open market price of its stock also decreases.

Ultimate Goal of Stock Investing

As a company's net worth grows the true cost of your stock investment grows. Finally this is the reason why we invest in stocks and what separates stock investing from all other kinds of investments. Growth in company net worth has made trillions of dollars of industrial worth to investors and is the basis of a capitalist economy. Stockholder’s equity supplies the capital that creates companies and permits them to grow.

The fair price of a moneymaking stock seldom ever trades below its stockholder’s equity even during bear markets. This is clear as intrinsic worth creates a ‘floor ‘ under the current price of a stock. If the stock of a rewarding company trades below its natural appraise it may be liquidated at a larger value than it stock price or it could be purchased by another company at minimal cost by creating debt secured by the assets of the acquired company.

Let's take a look at examples of corporations with a high stockholder’s equity rate of growth so we will compare the growth of stockholder’s equity to other investments. Our first example is Canadian Resources (CNQ) which is an energy exploration and production company. Over the past 15 years Canadian Resources had an expansion in stockholder’s equity of 2,573%.

The return graph that follows shows that a $1,000 investment in CNQ stockholder’s equity over the last 15 years grew to $26,731. Over the same time period a $1,000 investment in gold grew to $2,832 making a 183% return, 5-Year Government bonds produced a 154% return, home costs appreciated 91% and Treasury Bills produced a 69% return.

The 2,573% expansion in stockholder’s equity for Canadian Naturally Occuring Resources demonstrates the capability of the company to grow its revenues and to retain these takings. Kept revenues account for 75% of CNQ’s stockholder’s equity.

The expansion in CNQ stockholder’s equity made true wealth for investors. Over the same period Canadian Natural Resources stock price appreciated 2,576% which barely exceeded the 2,573% expansion in stockholder’s equity.

Chuck Hughes Stock Investment

While practical knowledge is well and good, understanding the intricacies of something can help a person take his efforts to the next level. This edict is true for every venture or endeavor that any person decides to take on, including a business in the real estate industry of the state of New South Wales in Australia. In fact, as the real estate industry has a tendency to be very volatile and unpredictable to the unschooled eye, formal education and training in the same can make a huge difference for any real estate entrepreneur, regardless of whether he is starting out or is already well established. Therefore, if you are involved or are about to be involved in the real estate industry of New South Wales, then you should seek out some provider who provides great real estate studies in NSW.

There are various types of such academies in the state which allow a budding real estate agent to learn the trade and succeed. Choosing the right real estate academy in NSW is something that can make or break a potential venture before it even takes off. Effectively, if you know what a good real estate academy in NSW offers, then you would find your selection process easy. Here are some characteristics of a goodreal estate academy in NSW.

Look for Training Courses that are Flexible and Adaptable – The course in real estate training in NSW that you choose for yourself should be able to give you flexibility in terms of the hours that you are willing to put into it. Moreover,real estate training in NSW should also allow you to choose the aspects of the real estate industry that you want to learn about.

For example, most people who have practical knowledge of the real estate industry are not very adept at the management side of the business. For such people, there should be an option to focus primarily on the management and nothing else. Similarly, people who have roots in management often miss out on the finer nuances of the real estate industry and any new developments or movements that influence it. Real estate training in NSW should allow such people to focus on industry specific programs as opposed to other aspects such as sales or management.

Potential for corporate tie ups – A good real estate academy in NSW would also be able to offer you the chance to tie your organization up with it so as to allow your team of real estate professionals to keep updating their inherent skills and abilities. This is a certain way for any real estate organization in New South Wales to keep itself current with all the industry developments and new techniques.

The solution comes in the form of courses and programs that focus on all inclusive real estate training in NSW. These types of courses would have modules for both, i.e. onsite training and offsite training. Choosing one that provides the right balance can be key for any real estate professional or business.

Real estate studies in NSW can make a significant difference in how successful your real estate business turns out to be, but only if you have chosen the right real estate academy in NSW.

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