Educational articles

The Differences Between Small Caps, Mid Caps and Large Caps

Stocks on the Australian share market are categorised by their size. This is usually measured by a company’s market capitalisation. It is calculated by multiplying the company’s current share price by the total amount of shares on issue. A market cap is essentially what the market values the company at. The size of a company has a huge impact on the characteristics of the stock. Knowing the difference between these types of companies will assist the investor to select the …

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Strategies to use when investing in uncertain environments

The Australian share markets this week experienced some volatile days. Primarily this was due to the leadership spill with the Liberal government. The previous week we saw the market being nervous with the trade wars between Turkey and the United States. What is clear is that the market does not like uncertainty. It reacts in fear and there can be a lot of fluctuation in share prices. These are the strategies that investors turn to in uncertain times: 1. Don’t …

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Stocks to buy and stocks to avoid in a trade war

Equity markets have been jittery recently as trade war threats continue. Most recently we are seeing tensions between the US and Turkey. However, there are still gains to be made on the Australian stock market despite these conflicts.  This trade war may create an opportunity for some Australian companies to become more attractive if their competitors are now faced with tariffs. These are the stocks to buy and stocks to avoid in a trade war environment. 1.Earnings in US dollars …

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7 Strategies to Take if Labor Changes Imputation Dividend Refunds

Labor has proposed a new policy where they want to eradicate cash refunds for excess franking credits. This means that if Labor wins the Federal election in 2019, thousands of SMSF holders could see a cut to their income. As a share investor, if this happens, it is important to understand the different strategies available to minimise the damage. A franked dividend means the company has already paid 30% tax on the income. This pre-paid tax on a dividend is …

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Advantages and Disadvantages of a Dividend Reinvestment Plan (DRP)

Companies may decide to pay a portion of their earnings back to shareholders in the form a dividend. This dividend can be paid out in cash or shares. The payment of shares is known as a dividend reinvestment plan (DRP). It is not compulsory for companies to pay out dividends as they may decide to keep the funds within the company as retained earnings. As an investor you may be given a choice to take up your dividend as a …

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