World Shares
Those interested in investing - or those who are experts at it, would realize that overall, world shares form the largest part of stockmarket value, so why don't many Australian investors make use of them to form a greater part of their share portfolios? While it would seem on the surface of things that they could be missing out on significant part of the investing scene by not investing in world shares, there is a reason for it. The fact is that most other countries don't have in place any laws regarding paying double tax on income. Rather than being able to offset your excess interest expense against your other income it must be deferred to next year. This has caused a great deal of confusion to many people. When you invest in Australian companies rather than world shares you have the secure knowledge that you will get franking credits for any income that has already had tax paid on it by the company in which you invest. This means a real saving on your tax when all is added up at the end of the financial year. So when thinking about investing in world shares, you need to be sure that the gain will more than make up for what you would lose in franking credits. It will probably be found that gearing levels can be properly managed and in some cases those world shares can actually be used as security should the investor wish to borrow to invest in more Australian shares.
Personal finance