So, when you read reports about markets or specific companies being “overvalued” or “undervalued”, you can generally assume there’s been a fair bit of analytical number crunching going on behind the scenes.

The data shows that investing small amounts consistently over time and riding out the ups and downs of the market by holding onto your investments for the long term, can produce a healthy return.

Over the past two decades, the top 500 US companies averaged a 10 per cent annual return and Australia’s S&P ASX All Ordinaries Index recorded an average annual return of 9.2 per cent.