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  1. #46
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    Quote Originally Posted by SBQ View Post
    No it's not. My aunt receives annual reports from her NZ holdings and on odd occasion, the 1st thing I look at is EPS. I remember decades ago with The Warehouse Group pushing their dividend policy as front page achievement in their glossy annual reports. Only to be disgusted that EPS was not a figure to be found - my aunt said you have to calculate that...
    Pretty sure I will be in trouble with justakiwi for this.

    But I think that this is the most appropriate response:
    om mani peme hum

  2. #47
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    Not this time

    Quote Originally Posted by Snow Leopard View Post
    Pretty sure I will be in trouble with justakiwi for this.

    But I think that this is the most appropriate response:

  3. #48
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    SBQ, so in summary what is your conclusion, appreciated.

  4. #49
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    Quote Originally Posted by voltage View Post
    SBQ, so in summary what is your conclusion, appreciated.
    The conclusion being for the vast majority of NZ residents, they would be better off buying a 2nd home and i'm speaking purely from the tax free capital gain perspective & the ability for the owner to increase the value of the home by DIY improvements which adds to the tax free capital gain (and please, don't remind me about the 5 year brightline test, only a fool sells a house within 5 years or leads IRD on that they intend to sell the house for a profit). In terms of share investments, what the NZ gov't has essentially done is pushed people into Kiwi Saver for which the largest benefit going to IRD & the managers that operate these funds. I'm not looking for an agreement from other forum members here so this is just my stark conclusion.

    @Snow Leopard: I also find it amusing that investors spend so much time on fundamental analysis and little regard on taxation and i'm speaking with the NZ perspective. I mean if it's as bad overseas on the ways you can twist figures on a financial statement around, what chance would the NZ investor wanting to learn will have? When I looked at the financial statements of various listed NXZ companies, it's very clear their reporting standards are wide open and manipulative and certainly not in best interest of the shareholder, yet you have all these Kiwi Saver fund manager painting picture that to understand such documents you need a phD on account of some sort. Watch the video in the link below as an example. Particularly at 4:35 where Charlie Munger rants at how EBITA is "BS earnings" yet it's taught at business schools even here in NZ uni classes.

    https://finance.yahoo.com/video/ebit...211547259.html

    So the question i've put before is why the obsession of dividends? I'm not saying dividends are bad but they're entirely different investment objectives. In NZ there appears to be zero distinction on the asset when it comes to paying dividends. Abroad, dividends are a last resort for a business if there are NO growth or expansion. Why is that not adopted here, yet we have NZ brokers continually pushing the 'dividend' sale? Why are they not pushing for capital gains which are tax free in NZ? (domestic shares that is), and when overseas markets that promote share value via capital gain, the NZ gov't believes IRD will miss out on tax so instead, they brought in FIF. What kind of double standard is? No other country in the world uses this kind of tax approach that I can think of. No wonder US brokers have shut the door on the NZX on their clients after NZ's FMA came into effect late last year.

    I'm not saying dividends are bad. Hell Buffet is a big fan for dividends but they don't understand why Berkshire has never paid a dividend to it's shareholder. and let's go back to early finance studies and understand 'what is the goal of the CEO'? Is that not to "increase shareholder value"? You certainly don't increase shareholder value by having a dividend paying program to meet some target while trying to expand the company's market share. Countless of great examples in NZ such as TWG; i've seen their annual reports not giving a full explanation why they had to issue more shares for which a portion of that goes back out to be paid as dividends - understand the tax implication that has. But who am I to say? I do know that when I invest in equities, I seek a return ON the investment, and not a return OF the investment in the form of dividends.

  5. #50
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    What you forget is that not everyone who chooses to invest, is a large investor as most people here appear to be. You guys have millions and millions of dollars invested, so your focus is going to be significantly different to mine. People like me, and people with far more than me but nowhere near as much as you, are simply trying to get a better return on what money we do have, than we would if we leave it sitting in the bank. Yes, we too are hoping to make a return ON our investment, but a return OF our investment is a major advantage. As I have already said often, dividends and DRP can really help us build our holdings. I'm not saying every company should necessarily pay a Divi but if they can, I am very happy to take it. If I can get both - even better. There was a time when someone like me had no chance of even getting started with investing. We had no option other than Bank deposits and hoping to win with Bonus Bonds. Now we have the opportunity to be a little proactive and do what little we can to improve our own financial situations. Sometimes I think people forget that investing isn't and shouldn't be, only for the "big boys".
    Quote Originally Posted by SBQ View Post
    I seek a return ON the investment, and not a return OF the investment in the form of dividends.
    Last edited by justakiwi; 16-01-2020 at 09:30 AM.

  6. #51
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    "Mighty oaks from little acorns grow."
    Millions is mostly talk or noise.
    Same disciplines required no matter the size of your holdings.
    My broker once told me most of their clients had less than $50,000 portfolios.

  7. #52
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    The ability for NZ companies to use imputation credits makes dividends much more attractive here than in most other countries. For those who are retired, dividends have the benefit of reducing the psychological pain of having to sell your holdings to survive. Also, for many, where they want to live has many inputs which are far more important than how much tax they will pay on their share holdings.

  8. #53
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    Quote Originally Posted by percy View Post
    "Mighty oaks from little acorns grow."
    Millions is mostly talk or noise.
    Same disciplines required no matter the size of your holdings.
    My broker once told me most of their clients had less than $50,000 portfolios.
    Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.

  9. #54
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    Quote Originally Posted by RGR367 View Post
    Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.

    Your performance is measured in your percentage return not the absolute size of your portfolio.

    Different investors/traders have their own individual circumstances which set the limits on available funds to invest and also there own criteria for the risks they are willing to take.

    If you achieve an average return of 10% pa in the long term, you are doing OK.

    As a footnote $12,345.67 is a 7 digit figure.

    Unity in diversity.
    om mani peme hum

  10. #55
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    Quote Originally Posted by RGR367 View Post
    Yes we all started small. But as your investments become big any dividend is welcome and that's how you eventually get "free shares". And when you've been investing for more than 10 years and got more winners than losers then surely your portfolio should be at least at a mid 7 digit figure. Otherwise I'd say, you've never really learned the Market. As a beginner then, the one thing I struggled hard is how to save enough so I can buy more of the stocks I was trying to accumulate. Margin Lending solved that issue for me.
    Current Principal: $10,000
    Annual Addition:$10,000
    Years to grow: 10
    Compound Interest Rate: 65%
    Future Value: $5,200,000

    Good luck with your 65% return every year
    Last edited by Brovendell; 16-01-2020 at 02:47 PM.

  11. #56
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    Congratulations to those of us who've been invested in the NZ sharemarket these several last years since the GFC. Remember though, that these have been exceptional years with exceptional returns and that we can't expect the good times to continue indefinitely.

    Sorry for the reality check.


  12. #57
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    Dont be sorry, just give us a date

  13. #58
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    Quote Originally Posted by Brovendell View Post
    Current Principal: $10,000
    Annual Addition:$10,000
    Years to grow: 10
    Compound Interest Rate: 65%
    Future Value: $5,200,000

    Good luck with your 65% return every year
    I said at least mid 7 digit figure so you've just made the grade and I'm happy for you too. But imagine if you were not constrained by not just having $10K as your additional annual investment money. Wouldn't it be nicer

  14. #59
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    Quote Originally Posted by macduffy View Post
    Congratulations to those of us who've been invested in the NZ sharemarket these several last years since the GFC. Remember though, that these have been exceptional years with exceptional returns and that we can't expect the good times to continue indefinitely.

    Sorry for the reality check.

    Congratulations to those that invested in the US market post GFC because they would of gain tremendous on the NZD/USD exchange rate.

    Quote Originally Posted by mfd View Post
    The ability for NZ companies to use imputation credits makes dividends much more attractive here than in most other countries. For those who are retired, dividends have the benefit of reducing the psychological pain of having to sell your holdings to survive. Also, for many, where they want to live has many inputs which are far more important than how much tax they will pay on their share holdings.
    In another thread in this forum, I explained the level of imputation credit is a joke because very few listed shares are fully 100% credited. Go across to the ASX and there's virtually none which therefore, the holdings will fall under FIF. Many of the ASX listings require a 'franking' account to be eligible if i'm not mistaken.

    As comparing to other countries, tax is everything. Especially in places like Canada where the SMALL investor can invest 100% tax free. For eg. RRSP, RESP, & RDSP offer the ability for the holdings to be sold 100% tax free. All these 'registered' accounts compound returns year after year tax free. RESP (education savings plan) the Cdn gov't matches contribution amounts and when the person is ready for uni education, they can sell the portfolio 100% tax free without having to repay the matching grants. Likewise with RDSP (disability savings plan). And then you have the TFSA (Tax Free Savings Account) where every Cdn resident over 18 can invest $6K (current contribution limit) per year (and the contribution amounts you miss in the pass can be added towards future years) ; ALL gains including dividends are 100% tax free. The USA has similar programs for investment that allow the small investor to be 100% tax free. But for the most compelling benefit for the investor in Canada (and likewise in the US), is they can structure their tax at retirement age to be at the low end of the income by selling the shares when they want to. As I explained before, in NZ you don't have any distinction on tax paid on shareholder income if the person is over $100K salary / wage income or $20K /year, because the income / gains from share investments can not be controlled ; much like dividends, when the board issues dividends it's beyond the control of the shareholder that may be stuck at the high end of the tax bracket. In NZ, the whole idea of deferring tax is alien like to the accountants I speak to but the reasons are clear. Who would not want to pay tax at a lower rate on their investments at a future date when their working income can be low or zero at retirement?

  15. #60
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    Many NZ companies fully impute their dividends, generally those who do most of their business in NZ. This does not have anything to do with FiF classification - most decent sized Australian companies are excluded from FiF. There is a list somewhere on the IRD website I believe.

    If my dividends are fully imputed, I as a high rate tax payer pay an extra 5% compared to the company retaining the earnings. Not so bad. Even better for those on lower tax brackets who can claim the imputation credits back.

    Agree some countries have more generous tax exemption, but this is not a deciding factor for me choosing where to live so it's barely relevant to me.

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