To Share, or not to Share?

In Uncategorized on November 24, 2011 at 9:57 am

The recent volatility and uncertainties in the global economy have been making most of us wary of the future of the investment market. Some of us steel-hearted punters see a lot of opportunities in these volatile times, and revel in the daily stock trades hoping to pocket some (mentally and emotionally) hard-earned cash. At the same time, we see a lot of traders with post-GFC scars steer away from the current unpredictable climate and putting all their dosh in the appreciating Aussie bills.

The million dollar question that everyone has been talking about then: is it a good time to Share, or not to Share?

Before arriving to a conclusion, I think it’s wise to first explore the pros and cons of investing in Shares. Why should we invest in shares, compared to other investment vehicles such as Term Deposits, Properties or even Managed Investments?

 Yes, Ma’am

  • little capital is required, with outlays starting from less than $50 (depending on the company’s share price)
  • entitlement to a portion of the company’s profit, giving you one source of passive income
  • if you’re an Aussie tax payer investing in a local company, any franking credits could be used to reduce any tax payable for the financial year, or be claimed as tax refund

 No, Siree

  • there is no guarantee to your capital investment – so if the company goes south, so too will your money
  • share holders cannot decide how much of the company’s profit they will receive, and the dividends receivable at any year could be varied
  • shares are much more volatile at a much higher frequency, so it is not for those looking for stable growth and income

So tell me your views… is it a good time to Share, or not to Share?


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