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Top dividend-yielding shares

I was thinking about taking my money out of my term deposit and buying dividend-yielding shares. How do I go about it? And I was thinking about buying the banks. I have about $100,000 and so I thought $25,000 into the big four banks would be a good idea. I am 38 years of age and was wondering if it is more tax effective to do this inside a self-managed super fund (SMSF). Lenny, St.Kilda, Vic.

I do like the idea of dividend-paying stocks, especially now with stock markets prone to go up and down, with too much down at the moment. I don’t like exposing yourself to only four companies and would prefer you to have 10 or even 20 companies, so you’re only exposed to one company to the tune of $5000 or five per cent. If there are European problems, banks could be hit but I do believe their dividends would still be pretty good. The best way to buy these would be inside a SMSF because you are only taxed at 15% but outside you could be hit by double or even more depending on what income you earn. Tom Elliott, a hedge fund manager and adviser who was on my SWITZER program on Sky News Business Channel recently outlined 18 dividend stocks he created for a client and here they are:

  • Telstra
  • Westpac
  • NAB
  • ANZ
  • Commonwealth Bank
  • QBE
  • AMP
  • Australian Stock Exchange
  • Woolworths
  • Wesfarmers
  • Coca-Cola Amatil
  • Sonic Healthcare
  • Orica
  • Transurban
  • Woodside Petroleum
  • Santos
  • Computershare
  • Brambles
I would throw in Rio Tinto and BHP Billiton to have exposure to our best miners.

These 20 stocks might not all suit you and your goals but it could be a decent start to see if the companies are compatible with your aspirations. Good luck.

Important information: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. For this reason, any individual should, before acting, consider the appropriateness of the information, having regard to the individual’s objectives, financial situation and needs and, if necessary, seek appropriate professional advice.

Published on: Monday, November 21, 2011

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