By strategically guiding clients, using experience and diligence, Lanham has offered proven and successful investment advice for over 30 years. Whether you are in the stages of implementing a Financial Game Plan or a Retirement Roadmap, or simply wishing to invest funds currently in low earning bank accounts. We are qualified and licensed to provide you with a personalised investment portfolio that will be tailored to your unique investment objectives.
Most Australian investors focus on attaining as high an income yield as possible in the hope that it matches their living expenses. Often share investments are selected based on the level of dividends that a company is paying.
However, as we have seen through each investment cycle this ‘chase for yield’ has always ended badly, and is likely to be no different through the current cycle. In fact , investing into Australia’s most popular ‘high dividend paying’ companies over the last five years has seen investors lose capital.
As an example, $100,000 invested into shares in one of the four major banks in 2005 would now be worth just $91,910 today. Over this 15-year period dividends of $118,689 would have been received by an investor, so the net gain would be $110,599.
This may appear to be a reasonable result, but as the capital value has diminished, so too has the dollar value of the dividend paid, which contradicts the purpose of the ‘high dividend’ approach.
An alternative approach is selecting companies that are focused on growing their business rather than paying out most of their earnings as dividends to shareholders.
Growth companies usually pay low dividends of between 1% and 2% in recent decades as their focus has been on retaining more than 50% of their profits to grow the business through acquisitions or investing in research and development.
Our business model is to keep our practice small and manageable, with a focus on quality clients who have life aspirations that they wish to fulfil through money, advice and planning.
