Educational articles

Stocks to buy and stocks to avoid in a trade war

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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

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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)

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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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Why has wage growth been so low?

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Wage growth is one of the indicators that the Reserve Bank of Australia (RBA) uses before they decide to raise interest rates. Low wage growth is one reason why the RBA is not yet raising interest rates. Low inflation is the other reason. Inflation is sitting under the RBA inflation rate of 2-3%. The current inflation rate 1.9%. We have had the longest period of low wage growth since the early 1990s. Wage growth is an important factor for firms …

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The relationship between the housing market and the economy

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The days of double digit housing growth has come to an end. Auction clearance rates for Sydney are falling below 50 percent. It is now clear that the heat in the housing market is coming off. Even if you are not a property investor, it is important to know whether this weakness will affect the overall economy. If it affects the economy, then it could potentially have an effect on your other investments. Therefore, is there a relationship between housing …

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