A few years ago, there were quite a few companies paying good fully franked dividends which meant that it was possible to have reasonably diverse portfolio and rely on income from franking credits (especially in pension phase). My strategy was to hold a portfolio of about 15 companies paying good dividends. Over the last few years, around half of the companies have had a significant decrease in share value with a concomitant decrease in dividends. Some of these companies dividend payments were clearly not sustainable. I lost my nerve and sold the poor performers, ending up overweight in banks and TLS. It is still possible to follow such a strategy? I don't think that I have the nerve to invest in companies like WOR, ASL, or FMG. However, TAH, SUN, IAG, AFI, SGN, EPX, BHP amongst others, in addition to ANZ, NAB, WBC are all paying reasonable dividends. My intuitive strategy is to invest more offshore, relying on growth. This is based to some extent, on a sluggish Australian economy and a Government that does not have either the understanding or political will to make the hard decisions.
