HELP CENTRE
Shares
Shares comprise a large proportion of many investors' portfolios. Research reveals that, over the long term, shares deliver a higher return than any other asset class, including property.
There are five compelling reasons for investing in the share market:
- Capital growth
- Dividends
- Ease of buying and selling
- Diversifying your investment
- Receiving shareholder discounts or entitlements
Think about whether you are interested in investing in shares. If you are thinking about investing in shares directly, work through a financial advisor as:
- They will be able to help assess whether investing in a particular company is worthwhile
- They can also provide advice on the right asset allocation, an important consideration for retirement planning and superannuation
Alternatively, you can invest in shares through a managed investment fund, wrap account or master trust:
- This allows you to diversity your portfolio across a range of different companies, industries, countries, regions and even across different investment styles
Shares become even more attractive when tax benefits are taken into account, as they can be used for generating tax effective income, largely as a result of dividend imputation. Dividends are paid out of company profits - but not until after company tax has been taken out (at the rate of 30%).
So when it comes to assessing your taxable income, the government gives you a credit (up to 30%) for the tax that's been paid on any shares you own directly. Shares held for more than 12 months may qualify for a 50% discount on any capital gains tax payable. But, as usual, seek the advice of tax experts and other advisors.
If you are looking to get involved with shares, you should speak to a financial advisor who will help you assess your investment goals, and the level of risk you are comfortable with.
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