As we have just passed the end of financial year below, it is important to know what is taxable when investing in shares and what can be deducted. Please be advised that you should treat this information as a general guide only and we recommend that you speak to a tax specialist. Dividends Dividends are considered income so they are taxed as such under the Australian tax system. However, as companies who issue these dividends may have already paid tax, …
There are different types of strategies that investors can apply to their share portfolio. These are the 5 most common: 1.Growth Portfolio This strategy is appropriate for investors with varying risk profiles, where the levels of growth can be adjusted to the individual. Stocks selected for this portfolio often have a high beta. This means that they move more than the market. These types of stocks can generate a higher return than the market but can also generate a higher …
Investors looking to measure the return of their investment may find using CAGR a good tool to find the average yearly growth of this investment. It is base of the assumption that earnings are reinvested. The absolute annual return does not take into account the compounding so the CAGR is more accurate way to calculate yearly returns as reflects the consistent rate at which the asset has grown. Formula to calculate CAGR Example: Let’s use an example where you have …
Read MoreHow do you calculate the compound annual growth rate (CAGR)?
Out of the asset classes of cash, bonds, property, and equities, the latter is considered the most risky investment. However investors can identify stocks to match their risk profile by evaluating the level of risk by looking at the debt, market cap, profitability, age and sector of that company. Large company debt Companies which have large debt numbers on their balance sheet are more risky than companies that have lower debt levels. To calculate the debt ratio you can use …
The comparison of property versus shares has been around for many years. Property investment has been popular for many Australians. However, there are hidden costs and large initial outlays involved compared to shares. In this article we compare eight characteristics between the two and discuss the differences. 1.Performance Over a period of 30 years, shares have outperformed property. Vanguard have tracked the performance of different asset classes for the last 30 years and have presented US shares as the top …
Read More8 reasons why investing in shares is better than property