Equities, also commonly known as shares, are classed as a growth asset as they are essentially linked to the revenues of the company’s business. They appeal to a range of investors because they offer attractive income opportunities and exposure to a broad range of industries and sectors that provide growth and diversity within an investment portfolio.

Successful investors take care of their investing as though they were operating a business. This is the major fact why it is so crucial to construct your investment plan – it is your business plan for investing in your business and it fixes your goals and objectives and how you are going to function to accomplish them.

Research by the Australian Securities Exchange shows that share ownership is increasing across the board among all age groups, incomes and education levels.


Capital gains over the long-term

Historically, equities have provided some of the strongest after-tax investment returns over the long-term. By owning equity in companies with growth potential, investors have the opportunity to bene?t from capital gains as the asset grows in value over time. Investors enjoy unlimited participation in the earnings of the ?rm.

A good source of income

The dividend yield on equities is another important source of return. Unlike term deposits, dividends from equities can have in?ation built into earnings where companies are able to pass cost increases onto customers.

Highly liquid

Equities are traded on major stock markets around the world. They are highly liquid which means that they can be converted into cash quickly and with minimal impact to the price received. Unlike direct investments, there is relative ease in the transfer of ownership and the movement of equities.

Tax advantages

The after-tax performance of equities is lifted by dividend imputation, a tax bene?t not shared by other asset classes. The dividend imputation system allows investors who have been paid a dividend to take a personal tax credit (franking credit) since the company has already paid tax on the dividend.

Corporate control

Equities come with certain rights including the voting rights to which the investors are entitled. The level of corporate control depends on whether the equity is classed as ‘ordinary’ or ‘preferred’ and on the size of your shareholding.

Ordinary shares represent the majority of shares held by investors. When you own an ordinary share of a company, you usually have one vote per share that entitles you to participate in the election of the board of directors.

Limited liability

One of the unique features of owning equities is the notion of limited liability. This means that when you own equity in a company and in the event that company loses a lawsuit and must pay a large settlement, creditors can’t come after your personal assets. Your liability is limited to the amount invested in the company.


While equity markets have historically produced higher returns than cash or fixed income over the longer term, the risk of capital loss exists especially over the shorter term. You should be aware of the risks of investing and speak to a qualified financial adviser to determine if an investment in equities is suitable for you.

As markets are not always efficient, using an active adviser like La Verne may also help to manage risks and improve performance. A good manager can identify undervalued securities to invest in by carrying out their own research on sectors and companies, including face-to-face meetings with management to determine the intrinsic value of a company’s share price.

Your investment plan will be specific to the shares factor of your portfolio and may form part of your general financial plan. Your investment plan will act as a conduct and suggestion point for all your decisions during the investment process.

In this entire process of making and executing of investment plan, La Verne will provide you support to find out the answers of these questions.

  • In which sort of assets are you going to invest?
  • What time period is you going to utilize to make your buy and sell decisions?
  • How much of your funds are you going to distribute to each investment?
  • What are your profit goals?
  • How much of your capital are you going to risk on each investment?
  • How are you going to handle your individual investment parcels?
  • What criteria must be met before you initiate an investment?
  • What criteria are you going to use to determine your exits?