New tax concessions favour small business – starting now

It’s taken a lot of give and take between politicians but the proposed changes to small business taxation rules from the 2015/16 Federal Budget have been passed into law. The following have been backdated to apply from 1 July 2016, ie. the 2016/17 financial year: The small business turnover threshold has increased from $2 million to $10 million. This allows more businesses to benefit from a range of concessions, including the $20,000 instant asset write-off and the lower company tax rate. ...

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The risks of trying to pick future winning stocks

It's tough for both professional and personal stock pickers to consistently beat or at least match the market. But maybe many investors don't recognise just how tough it is for stock pickers to succeed. Recent research by a US academic underlines that pickers of individual stocks typically have a minimal chance of achieving a satisfactory return for the risks involved. Professor of finance at Arizona State University Hendrick Bessembinder has compared how the approximately 26,000 stocks that...

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Don't become a one-eyed investor

Behavioural economists warn investors about a trap known as "confirmation bias". This involves deciding on a course of action and then looking around for evidence to support that action. The proliferation of online investment newsletters and blogs means that investors can almost immediately find someone, perhaps a so-called expert, who agrees with them. In short, the trouble with "confirmation bias" is that it blocks out contrary opinions and research. As investors try to come to terms with the...

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Give your children a saving and investing edge – for life

Perhaps the best way to give your young children a lifetime saving and investing advantage is to ensure they are as financially literate as possible, as early as possible in their lives. By indulging their every whim is likely to have the opposite effect. It may pave the way for them to become conspicuous spenders; a wealth-destroying approach to dealing with money. Australian students have mixed results in a just published 2015 OECD study of the financial literacy of 15-year-olds in 15...

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