‘Selected shares solid’
I REFER TO “Vic’s non-guaranteed taxfree R5m portfolio”. You mentioned “this portfolio is well designed for a single taxpayer who has no other income”. That’s crucial, as the income on retail bonds is taxed as interest and thus each individual’s tax situation could affect the after-tax income from the portfolio.
With regards to SA retail bonds, it should be noted that to get the 8% yield you’d need to invest in the five-year bond and that the income from these bonds will be taxed as interest. Please see below a portion from the website’s frequently asked questions: https://secure.rsaretailbonds. gov.za/FAQ.aspx#question20
What are the current tax exemptions? For persons under the age of 65, the first R22 800 in interest received during a tax year is regarded as tax-free/exempted. For those over the age of 65 the first R33 000 in interest received during a tax year is regarded as tax-free/exempted. These amounts are applicable from your interest earned for the tax year 2011/2012.
We agree your four selected shares are, high dividend yielding companies with good long-term growth potential. Many investors don’t understand they can reduce risk in investing on the JSE by taking a long-term view and that they won’t get good growth without taking some risk.