If it is too good to be true…

Co-founder of the Switzer Report
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The old adage: “If it sounds too good to be true, it probably isn’t” is not always correct, but when it comes to investing, it seems to be right more often than it's wrong. Certainly, it should scream “CAUTION” to a potential investor. Not necessarily a red flag, but a strong push to do your homework.

Over the last several months, I have been inundated with offers promising “high” income returns from investing in international shares, and even higher income returns from investing in Australian shares. I have to declare at the outset that I am immediately “suspicious” of these offers, because income from shares (dividends) is more like 4% in Australia and 2% overseas. Here is a chart from the Reserve Bank that shows the long-term picture.

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