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Weekly Insights From The FNArena News Desk 02/07/19

The first six months of calendar 2019 have again superbly proved as to why this equities bull market has been dubbed “the most hated in history”.

At face value, equity markets have rallied by up to 20% suggesting making money from asset price inflation via the share market has seldom been easier for investors, but a closer look reveals nothing could be further from the truth.

Imagine an investment portfolio consisting of Adelaide Brighton, Bank of Queensland, Challenger, Caltex Australia, Domino’s Pizza, Flight Centre, Link Administration, Pendal Group (the old BT Investments), South32 and the old Westfield, now Unibail-Rodamco-Westfield.

An equal weighted portfolio of these ten household names in Australia generated a negative return of nearly -10% between January 1 and June 28. That’s ex-dividends, but the average yield from the portfolio cannot fully compensate for the erosion in capital values. Besides, the ASX200 Accumulation index is up nearly 20% over the same period.

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