Personal investors better off away from Blue Chips

Patient personal investors will get better returns from illiquid assets than blue chip shares. UNSW’s Professor Peter Swan said that stocks that traded less frequently tended to give better returns. The S&P/ASX Small Ordinaries Accumulation index has returned 25.3 per cent per year over the last three years, compared to 20.8 per cent for the S&P/ASX 100 Accumulation index. Professor Swan said that higher returns represented compensation for lack of liquidity and was yet to discover an asset class it did not apply to.

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