We can assist you in setting up a Direct Share Portfolio.
What Are Direct Shares?
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.
Changes in share prices reflect the market value of the company. Fluctuations in the market value of shares will be reflected in the underlying value of your original investment.
Benefits Of Investing
By investing into a companies shares you may recieve an income which is paid to you in the form of dividends, representing your share of the company’s profits.
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 per cent. 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 significan 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 1,700 companies listed on the ASX covering wide range of industries such as materials, financial services, retail, health care and telecomunications. investing across differant 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 start your portfolio with as little as $500
The share market is characterised by volatility, with the value of share prices often fluctuating on a daily basis. However, over time, the impact of the daily movements diminishes.
However, shares can be relatively low risk if you take a longer-term view and invest in well-researched companies that are fundamentally sound. If you are not comfortable entering in to the share market directly, but want to invest in this asset class, a managed investment (where your funds are pooled with those with other investors and invested by specialists) may be a good investment option to start with.