And now for some good economic news. As of September 2016, Australia has enjoyed 25 years without an economic recession. No other developed country has achieved this. It is historically unique.

It also means that people who have owned part of the Australian economy – also known as ‘investors’ –  have done very well indeed.

This is easily the longest period of sustained economic growth Australia has ever had. Recessions are defined as two quarters (ie six months) of negative economic growth. They have actually been quite common over the years, and many people saw them as necessary corrections when the economy either grew too fast or relied too much on certain types of economic activity. In 1990, during our most recent recession, the Treasurer Paul Keating described it as the ‘recession we had to have.’ Whatever your politics, he was probably right.

Prior to 1990, Australia experienced recessions in 1981, 1974, 1961 and 1952. There was no recession in the 1940s – wars tend to be good for economic activity, which is kind of weird. The 1930s also had a reasonably significant recession: you might have heard of the Great Depression. So, roughly every decade we have had a recession. Until the 1990s.

australia's second chanceThere are lots of different reasons why the Australian economy is so strong by world standards. One that often goes unnoticed is the impact of migration on economic activity. In a wonderful book titled ‘Australia’s Second Chance,’ journalist George Megalogenis explores Australia’s economic history since European settlement. He draws a direct correlation between the economic impact of sustained immigration and the relative strength of the Australian economy. When migration is strong, so is the economy. If you can find yourself a copy, have a read of this excellent book. Or, if you are short of time, have a listen to George speaking in this podcast with the ABC’s Richard Fidler:

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You can see the impact of migration very easily in the following graph, provided by Australia’s Immigration Department. The graph shows net overseas migration (people coming in minus people going out) since the early 1980s. The 1980s – the period leading in to the 1990 recession – had relatively low levels of migration (and subsequent population growth). Migration then rose steadily through the 1990s, and spiked in the late 2000s – when pretty much everywhere else in the world was enduring the Global Financial Crisis. Put very simply, all those new arrivals boosted Australia’s economy in a way that no other country enjoyed. In fact, the recessions in other countries were probably made worse by all those people leaving to come to Australia. Their loss was our gain, quite literally.

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At the moment, more than 25% of Australians were born somewhere else. This figure is expected to rise in the next 30 years. Australia is and will remain a ‘destination country.’ Our political stability, our economic stability and even our climate make this a place that people want to be. This means that we can look forward to large numbers of new arrivals for some time to come. And we can look forward to the economic development that will come with it.

While it would be optimistic to think that we will have another 25 years without a single recession, it is not optimistic to expect that Australia’s economy will do at least as well as anyone else’s over that period. That would just be realistic.

So, what should you do about this? Put simply: try to own at least a piece of the Australian economy. This is what you do when you invest in what we like to call ‘representative assets’ – assets that will perform in rough concert with the general economy. Think of things like stand alone houses in suburbs where people already want to live, or a broad-based investment in Australian shares. These are the things that will appreciate in value if the economy continues to grow. They will ride the wave of normal economic growth.

The key to buying representative assets is to take a long-term view. Our economy has excelled over the long-term – it has not been a short term standout. Other countries have flown higher for shorter periods of time (think Ireland in the mid-80s). We tend to grow by less each year. But we do it every year. Our economy wins the marathon, not the sprint.

Your investments should take the same approach. So, why not talk to us about how you can make a representative investment and participate in the good news story that is Australia’s long-term stability? Don’t be sitting there in 25 years thinking ‘I wish I had…’