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Dividend Policy

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Capital retention will shake dividends in 2020

Sixty per cent of the ASX200 total return is due to dividends, and for Financials, it rises to more than 70%. Moves to limit dividends could both reduce investor incomes and affect valuations.

Franking policy may increase corporate tax avoidance

The results of three studies suggest that companies undertake less tax avoidance due to franking credit refundability. It gives an incentive to pay corporate tax and franked dividends to satisfy Australian shareholders.

A fair go in favour of Labor’s franking policy

Cuffelinks has received over a thousand comments on Labor's franking credit proposal. Here is a selection in favour of the policy to balance the generally critical nature of most comments and articles on the policy.

The role of bonds and hybrids in franking loss

Amid the many strategies proposed to overcome Labor's franking policy if adopted, often overlooked is building a portfolio of the right types of bonds and hybrids as an alternative source of income.

Three reasons why current dividends matter

Dividend streams tend to be stable and determined by fundamental factors. Unlike capital valuations, which are affected by estimates of prospective returns which are, in turn, strongly affected by market sentiment.

It’s good Amazon and Buffett pay no dividends

Australians love dividends and complain when a company cuts its payouts. But neither Amazon not Berkshire Hathaway are ever likely to pay a dividend, and it doesn't bother most of their investors.

Capital management techniques in LICs

Many capital management techniques are used by LICs in an attempt to narrow or eliminate the discount at which the price trades relative to net tangible assets – all with varying success.

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Maybe it’s time to consider taxing the family home

Australia could unlock smarter investment and greater equity by reforming housing tax concessions. Rethinking exemptions on the family home could benefit most Australians, especially renters and owners of modest homes.

Supercharging the ‘4% rule’ to ensure a richer retirement

The creator of the 4% rule for retirement withdrawals, Bill Bengen, has written a new book outlining fresh strategies to outlive your money, including holding fewer stocks in early retirement before increasing allocations.

Simple maths says the AI investment boom ends badly

This AI cycle feels less like a revolution and more like a rerun. Just like fibre in 2000, shale in 2014, and cannabis in 2019, the technology or product is real but the capital cycle will be brutal. Investors beware.

Why we should follow Canada and cut migration

An explosion in low-skilled migration to Australia has depressed wages, killed productivity, and cut rental vacancy rates to near decades-lows. It’s time both sides of politics addressed the issue.

Are franking credits worth pursuing?

Are franking credits factored into share prices? The data suggests they're probably not, and there are certain types of stocks that offer higher franking credits as well as the prospect for higher returns.

Are LICs licked?

LICs are continuing to struggle with large discounts and frustrated investors are wondering whether it’s worth holding onto them. This explains why the next 6-12 months will be make or break for many LICs.

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