Growth investors have on average lost 6 per cent from their portfolios for the 12 months to January, according to research from Perennial Investment Partners.
Retail investors have suffered as volatile markets saw major growth assets flounder, particularly in the last three months, Perennial head of retail funds management Brian Thomas said.
"The big question for investors is: is this the start of a prolonged bear market with low returns? Or have we just seen a dramatic January correction with the prospects of reasonable returns for the balance of the year?" Thomas said.
January saw the All Ordinaries Index end 11.8 per cent down, the worst month on the Australian sharemarket in 20 years. On January 22 the index had its biggest one-day drop in more than 18 years, tumbling around 7 per cent.
"The bounce-back after the huge fall on 22 January is a good example of how it is usually best to stay calm during such dramatic sell-offs," he said.
Data from Perennial suggests during the last 19 years investors only had to miss the best 27 days in the share market to reduce returns to that of cash.
"Whilst we cannot predict the future, our view is that with our strong economy and an aggressive Federal reserve, reasonable returns are likely from here to the end of the year, with extremely volatile swings particularly in the first half of the year - it looks like a good time to invest in quality growth assets," Thomas said.
