Precipice looms if franking rules change

Is your portfolio too reliant on franking? In Spread yourself out, but not too thinly, I said that diversification – spreading your investments across a variety of assets – means you’re not overly exposed to the vagaries of luck. In particular it helps avoid "cliff risk" – the chance your investments might fall over one. If you want to know what cliff risk looks like, take a look at the chart below, showing the share price movements of McMillan Shakespeare, one of the country’s leading salary packaging companies. [[{"type":"media","view_mode":"media_large","fid":"242","attributes":{"class":"media-image alignnone size-full wp-image-10398","typeof":"foaf:Image","style":"","width":"780","height":"359","alt":"graph"}}]] The moment when the Rudd government announced it...

Is your portfolio too reliant on franking?


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