Download WNS 01-09-2015

Women who want to learn, share and discuss the
Australian share market and investing strategy.
This group is sponsored by Lincoln Indicators Pty Ltd ACN 006 715 573 (Lincoln). AFSL 237740
www.lincolnindicators.com.au
All comments and discussion on at this meeting or function are made without taking account of your objectives,
financial situation or needs. You should therefore consider the appropriateness of any comments or discussions, in
light of your objectives, financial situation and needs, before taking any action. All views and information
expressed at this meeting or function are not the views of Lincoln and/or its directors, agents, representatives and
employees. To the extent permitted by law, Lincoln does not accept any liability or responsibility in connection
with the use or reliance to the comments and discussions that occur on this page.
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Dividends
 Why are income (high dividend paying) stocks
attractive to investors?
 Low interest rate environment
 Dividend yields compares favourably vs. bank
term deposit rate, investment property yields
 Franking credits are important to all
Australians.
 Reduces tax for higher tax bracket
 Tax credits for SMSF, retirees, lower tax
bracket or tax exempt individuals
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Dividends
 Payout policies make companies disciplined
 Enhances in return on equity (ROE)
 Big dividend payers include Banks , Telstra, Real
Estate Trusts, BHP and RIO
 Some companies have Dividend Reinvestment
Plans (DRPs)
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Key considerations
 Dividend yield
 Changes with share price. As share price goes up,
dividend yield comes down.
 Dividend yield=Dividend per share (cents)/ Share
price
 Market dividend yield is 6%
 Franking credits
 Attached to dividends which represents the amount of
tax the company has already paid.
 Dividend yield X 1.428571 (100% franked)
 Hold the stock 47 days to be entitled
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Key considerations
Ex dividend date vs record date
 Ex date is two business days before record date
 You need to be a shareholder before the ex-date
to be entitled to the dividend
 Record date 30/08, Ex-date 28/08
Sustainability and growth
 Beware of dividend traps
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Homework
1. Choose a stock that can be considered an
income stock?
2. What is its dividend yield?
3. What is its gross dividend yield if franking
credit is included?
4. When do you need to own the stock to be
entitled to dividend?
Source: ASX, company website, Commsec
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Investment Strategy
• An investment strategy is a set of rules, behaviours or
procedures, designed to guide an investor's selection of
an investment portfolio.
• Why is strategy important?
– To help make suitable decisions when buying a stock
ie. growth v income potential
– To give guidance in when/how to exit a stock
ie. take profit v stop loss, stop loss levels
– To aid in head over heart decisions
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Investment Strategy
• Some important factors to consider when devising your
strategy include:
–
–
–
–
–
Age
Income v growth
Risk adversity
Share market knowledge
Time/availability to monitor your portfolio
• Regular review of your strategy is just as important as creating
the strategy in the first place.
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Investment Strategy
Further reading
• http://www.moneymorning.com.au/20150829/this-is-how-ibeat-the-fear-of-share-trading.html
• http://www.investors.asn.au/education/shares/fundamentalanalysis/fundamental-investing-strategies/
• http://www.asx.com.au/products/shares/your-investmentstrategy.htm
• https://www.lincolnindicators.com.au/profiler/
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Elevator Pitch
• An elevator pitch is a succinct presentation of an idea covering
all of its critical aspects and delivered within a few seconds.
• Create an elevator pitch to define your needs and
circumstances as an investor.
• Use your elevator pitch to help define what you need in your
investment strategy.
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Homework
•
•
•
•
Women and Shares trading game
Each member has one stock to pick
Tell us how you picked your stock or what you like about it
Each following month we will review our portfolio and see how we’re
tracking
• Each member can choose to hold your stock or sell it and buy something
else
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