Tax deduction incentives

Some stocks listed on the stock market and even private companies have tax deduction incentives if you buy their shares.

Governments of different countries, states or provinces create incentive programs to help certain sectors of the economy.

As an example, junior exploration mining society, profit from different schemes that permit tax deductions against personal revenue.

Why is that?

Usually these tax deductions incentives will help sluggish or risky sectors of the economy, just like mining exploration or help start up companies.

Usually, the higher the tax deduction incentive, the riskier the investment.

Are these good investments?

Start-ups may take a long while to produce positive balance sheet, normally this is "patient capital" more, be prepared to loose your money. Many start-ups do not go for more than a few years, when they do.

Junior mining.

Junior mining exploration companies have to do lots of exploration before they find a deposit that is large and rich enough to go into production.

Then going in production requires large investments.

What these companies do then is put more shares on the market and everybody gets diluted. You may even loose your money.

Before they make a profit or before the market expect them to make a profit may take a very long time. That is why we call these investments " patient capital".

Should you invest in such companies?

If you have money to spare and are prepared to wait and even loose your capital, go ahead. Do not buy just because of the tax deduction incentives .

In any case do not bet large amounts because it is almost like playing casino or lotto gambling. If you are lucky, it is mostly luck; you may make some money in these companies.

A better way to invest is still to do it in a rational way in non-cyclic sectors of the economy and buy the best growth stock titles on the public market.

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