What is it about?
Purchasing shares gives you part ownership in a company and the right to receive a portion of the profits, commonly referred to as dividends. An added bonus is that dividends can provide you with substantial tax benefits, because they are usually franked – either fully or partially. This means the company has already paid tax on this money – usually to the corporate tax rate of 30%. In some cases, it may be even higher.
6 Reasons to Consider Direct Shares
- Capital Growth – Over the long term investing in shares can produce significant Capital Gains through increases in share prices.
- Dividends – Companies pay their investors most of their post-tax profits in the form of dividends.
- Ease of Buying and Selling – Compared to other investments, shares are very portable and can be bought and sold quickly.
- Diversification – Diversify your investment portfolio by having part of your money invested in shares. There are over 2,100 companies listed on the ASX covering wide range of industries such as materials, financial services, retail, health care and telecommunications. Investing across different sectors can help reduce your risk.
- Shareholders discounts and entitlements – Some companies, for example retail, hospitality or entertainment, offer generous discounts to shareholders when they buy goods and services from their companies or subsidiaries.
- Control the size of your investments – As the investor you can control the size of your stock purchases, you can have a minimum holding as low as $500.
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