Eureka correspondence

Searching for dividends, and election 2016.

As an investor in the share market, I find it difficult at times to find suitable companies in which to invest.  The Australian investing universe is quite small.  Of the roughly two thousand companies listed on the stock exchange, nearly 50 per cent are engaged in the mining industry.  Further, approximately only 640 companies are showing positive earnings, while over 1100 companies are reporting zero or negative earnings.

As for the all important dividends, only around 520 companies are reporting any sort of dividend. However, not all companies are suitable for purchase given their individual financial situations. Those that are suitable for purchase usually attract a premium well-above what is a sound long-term investment.

If the government is to reduce the corporate tax rate to ~25 per cent, then maybe this action could be structured to encourage both local and international companies to list on the Australian stock exchange thereby giving investors greater opportunities for portfolio diversification especially in multi-national companies (think S&P 500).  Not only do the companies benefit but so do investors and the overall economy.

- Garry 

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