In Aussie-dollar terms, developed market shares have delivered a 6.3 per cent annual compound total return, and emerging market shares 5 per cent.

Aussie bonds have generated 6 per cent a year, which looks mighty good considering they haven't lost you money in any of the calendar years in our sample – by contrast, the local stockmarket lost you 38 per cent in 2008 and 9 per cent in 2011.

Positive correlation

Australian property has also generated annual price gains over our sample period of 6 per cent, based on the ABS's established house price index. Since early 2007, this broad measure of property prices fell in two years since the start of 2007: in 2008 and 2011. Those were also the two years the ASX lost you money, pointing to an unpleasant positive correlation between two major asset classes for local investors.

What's the point of all this rear-view mirror work? Well, stretching back to the start of 2007 incorporates a bit of late-cycle euphoria, a major crash and a slow recovery around much of the world. Is it a typical period? It's hard to imagine so, given central banks' unprecedented meddling in financial markets. But at least it has a crash in there, as well as other major wobbles such as the European debt crisis earlier this decade and a big scare in China in August 2015.

Compare that to this year. The global economy hit a purple patch in 2017, and a lot of things went right. We are at a profitable point in an odd cycle in which growth is running well ahead of inflationary pressures, keeping rates low and providing the perfect platform for investing. In particular, the self-sustaining recovery in Europe, continued growth in China and even signs of dynamism in Japan have added to the well-advanced US economic recovery.

The point is, we should consider the returns over the past decade as well as this year's when deciding whether to change strategy now.


But I would argue it's better not to be too focused on these numbers at all.

Saving matters more

Better to ask a much more pertinent question: did I save enough last year, and should I save more in the years ahead? If you don't save enough through your working life, you are not going to reach your retirement goals, almost irrespective of where your money is invested.

A recent survey by Schroders of more than 22,000 investors across 30 countries showed that two-thirds of retired respondents wish they had saved more before quitting work. In Australia, the figure was above 70 per cent. The proportion among the broader population is likely to be much higher; Schroders' sample population was a sophisticated bunch who were actively involved in managing their financial assets and who planned to invest at least 10,000 euros ($15,400) over the coming 12 months.

I'm always wary of the proverbial hairdressers telling me I need a haircut, but in this case advice and incentives can align. I think it's highly likely that we aren't saving enough.

"There's a strong message from those who have already retired: 'I wish I had saved more'," Schroders global head of retirement Lesley-Ann Morgan sums up. And that savings gap between what investors are saving versus what they feel they need to save "is further compounded by the fact we're in an age of low rates and low returns," Morgan writes. "To reach their goals, people will need to save even more than savers did in previous generations."

In other words, the underwhelming 6-7 per cent return from shares since early 2007 could extend into the next decade. The survey shows that Australian investors are saving 12.1 per cent of their income for retirement, but on average feel like they need to save 13.6 per cent to live comfortably in retirement.

So ask yourself: how much did you save this year? And how much will you save the next? Amid all the crystal-balling, those are the numbers investors can definitely control and should be focusing on.