Let's face it. We are the lucky country.
We Aussie battlers work hard and, in turn, we're rewarded. Handsomely.
Our stock market, according to movevator.com, has been the best performing of any market since 1900. Better than the US. Better than the UK. Better than any country's stock market.
Although many of us might not realise it, a 7.2% average annual return, is enough to double an investment in 10 just years. Double.
According AMP Limited (ASX: AMP) however, when dividends are reinvested, our market has returned around 12% pa over the past 114 years!
When you consider some of our biggest listed companies pay dividends between 5% and 7% annually, the return needed to double your portfolio becomes a whole lot easier.
Not so fast!
"If it's that easy, why isn't every Aussie a millionaire?" I hear you say.
My answer: Too many of us buy the wrong stocks, at the wrong times.
The art of recognising a good investment and remaining self-assured under pressure is what separates all those millionaires from the pack.
For example, Telstra Corporation Ltd (ASX: TLS) proved to be an excellent investment three years ago. Including its dividend, it has returned over 100% of the initial investment but before 2011, it was coming off three years of losses!
But now, despite ongoing dominance in the local telecommunications market and a firm focus on booming Asian markets, its share price has caught up with its potential. As such I think, for new investors, its best left on the watchlist.
One blue chip which could be in the position Telstra was three years ago is National Australia Bank Ltd (ASX: NAB). It is still focused on cleaning up its mess in the UK but it's taking the right steps.
However investors are reminded of NAB's accident-prone history. This has made it unable to drive share price appreciation over the past 10 years equal to that of its 'major' bank peers. As such, until I see bigger divestments of its UK commercial loan portfolio, I will not be hitting the buy button on NAB shares.
Two stocks which I do have my eyes fixed on however are Macquarie Group Ltd (ASX: MQG) and BHP Billiton Limited (ASX: BHP). Both have global exposure and will benefit from a depreciating AUD/USD, which the Reserve Bank of Australia has hinted is significantly overvalued.
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Of these four companies, I think BHP Billiton currently sports the best price tag. However with a market capitalisation over $200 billion and a dividend yield of just 3.3% fully franked, it's harder for it to grow rapidly when compared to smaller, higher-yielding dividend stocks.
