Our investment philosophy

We recommend investing no more than 10% of your portfolio in individual stocks and in index funds.


A summary of our investment philosophy

Our investment philosophy can be summarized as follows:

The value of investing depends not so much on the price you pay, but on how long it takes you to recoup your initial investment (learn more here).

This does not mean that you should ignore volatile markets, or discount the importance of price. It simply means that it’s a better idea to take the long-term view.

Read more about our investment philosophy.

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What happens when we sell?

When you sell your investment, you pay an administrative fee to The Commonwealth Treasury to make this possible. Our fees vary depending on your investing plan, so we’ve given you details below to help you decide how much you need to invest each year.

If you invest in Australian shares, you need to ensure that you are within the “capita-weighted” income tax thresholds to be able to get a tax deduction for dividends. For example, if your income is $60,000 and your taxable income is $10,000, you need to pay tax at a rate of 30%. In addition, you need to know that the maximum annual income tax deduction you can get from the ATO for disposing your shares is $30,000. If you’re not sure what the ATO income tax thresholds are, you can download and read the Government’s ATO Income Tax Tables. In some cases, your total tax is less than your marginal tax rate so you won’t pay any income tax at all.

It is worth considering these factors when deciding whether to invest in Australian shares:

Income Tax Deferral rules: If your marginal tax rate is higher than the tax rate that applies to your shares, it could provide an incentive for you to invest in Australian shares. For example, if you’re planning to put all your money in shares and get an effective tax rate of 33% on your shares, it would be worth putting all your money into Australian shares to get your effective tax rate of 27% on your shares. Marginal tax rates only apply to the first $36,000 of your net income (after tax). You needn’t pay capital gains tax on any Australian share profits (the profit on which you pay capital gains tax on). If your rate of tax is lower, consider putting a proportionate share of your assets into Australian shares in order to lower your effective tax rate. You don’t have to put all your assets into Australian shares in order to avoid paying any tax on the gains. However, you may choose to do so if you expect to gain significant amounts of money from the shares. You can always sell your shares at a profit. As you can read in our guide to selling shares, we suggest you do so before your gains reduce your effective tax rate.

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