Should I invest my 2019 tax return?

It’s that time of year again when we all get excited about the prospect of receiving a lump sum courtesy of the Australian Tax Office. However, with the market at all time highs and the Reserve Bank dropping the cash rate should investors hold on to their tax returns?

Whilst I cannot tell you if the short term future will be positive or negative for the Australian market, I can tell you that over the long term average gains are around 8%, so it is worth taking the risk. Especially with bank interest rate going even further down.

So here are a couple of companies that you should consider if you are looking to outperform your savings account:

Macquarie Group Ltd (ASX: MQG)

Macquarie is a global provider of banking, financial, advisory, investment and fund management services, headquartered in Sydney, and also known as Australia’s ‘fifth big bank’ on the ASX, but has a key difference from the other ‘Big Four’.

Macquarie is an investment bank, with earnings coming from infrastructure, venture capital and asset management, rather than the mortgages and loans that would dominate the ‘Big Four’ balance sheets. This provides Macquarie with a diversified income stream, which we feel is a safer bet than Australian mortgages provided by a traditional bank. Another great aspect is that Macquarie is currently yielding a healthy 4.55%.

Collins foods (ASX:CKF)

Collins Foods is a KFC and Taco Bell franchisee in Australia and KFC franchisee in the Netherlands and Germany, the owner of Sizzler restaurants in Australia.

Collins Foods has seen strong growth on the back of KFC store acquisitions and the introduction of Taco Bell into the Australian market. This growth is likely to continue, along with this, another dividend increase next year.

Even with the rollout of 50 Taco Bell stores, funded by cash, Collins Foods has been steadily growing their cash stockpile and will continue to look for new investment opportunities to leverage off their management strength.

www.stockinfo.com.au

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