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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. www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares 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) www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares 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. www.facebook.com/WomenAndShares 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/ www.facebook.com/WomenAndShares 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. www.facebook.com/WomenAndShares 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 www.facebook.com/WomenAndShares