adding garage to ranch house bowen remodeling highland park adding onto a ranch style home vernon hills kitchen redo mundelein reliable remodeling .. Chicago Drug testing

Investment Capital Gains

Have you bought any mutual funds this year or late last year while the market was doing its skyrocket thing? Last year it was hard to lose money. This year it has been easy.

You should be calling your mutual fund (they all have 800 numbers) to find out if and when they plan to pay their capital gains and dividends. You might say to yourself, they won't be paying anything this year because the fund is selling for less now than it did at the beginning of the year. Think again. It is very probable that the mutual fund manager took profits on many high flyers that he bought cheap last year. According to the way funds are set up those profits are taxable to holders of the mutual fund and not to the fund itself.

It is possible you bought a fund at $40 per share that is now selling at $30 per share and be hit with a 25% capital gains distribution of $10. On paper you now have a $10 per share loss and a tax bill based on the $10 per share distribution. That is adding injury to insult.

With this as a possible scenario it might be prudent to sell your fund for less than you paid for it. You should work the numbers with your accountant to see if this might reduce your tax bill. But you have to do it now. You can't wait until after the mutual fund declares its capital gains distribution. This is especially true if you have purchased any high tech or international funds during the past year. You can carry losses forward to next year to offset against profits and distributions next year.

The greatest numbers of mutual funds declare these distributions near the end of the year, usually starting in November with most of them in December. The rumors I hear are that the distributions will be early this year because of the poor performance of the majority of funds.

This applies to everyone who does not have a tax shelter of some kind such as a 401k, IRA, SEP or other similar investment vehicle.

One piece of advice I want you to heed. Don't buy any mutual funds now because they are "cheap". Wait until after they declare their capital gains and dividend distributions. You could be whacked with a big tax bill.

Al Thomas' book, "If It Doesn't Go Up, Don't Buy It!" has helped thousands of people make money and keep their profits with his simple 2-step method. Read the first chapter at http://www.mutualfundmagic.com and discover why he's the man that Wall Street does not want you to know.

Copyright 2005

al@mutualfundstrategy.com; 1-888-345-7870

In The News:

You Don?t HAVE To Be Trading

As a novice trader, you'll often feel the need to... Read More

A Stock Market Investment Strategy

I feel that an investment strategy in the stock market... Read More

The Big Bad Bear

The big bad bear is stirring again. So far he... Read More

The Stock Market Investor?s Worst Enemy

Every stock market investor faces one primal enemy. An enemy... Read More

Long-Term Investment In Todays Market?

The stock market is very unstable at this time going... Read More

Your Trading Objective: Why is that so Important?

You've decided to try your luck at trading stocks or... Read More

Will the Stock Market be Lower in October?

The stock market often closes a week in the middle... Read More

Choosing a Stock Broker

If you were to find that you had some severe... Read More

KISS Formula

There are formulas for just about everything, but it has... Read More

Dividend Paying Stocks

I would like to share with the reader an article... Read More

Stock Analysis

I receive emails from Morningstar. This company provides statistics and... Read More

Complacency

During the month of January the Dow Jones Industrial Average,... Read More

Stock Market Diversification

In one of my previous articles (Investing in the stock... Read More

Valuation

Every day I hear from the "experts" on CNBC-TV and... Read More

Laws and Efficiencies and Theories of Diminishing Returns

The basis of diminishing return discussions surround such simple notions;... Read More

Does Japan Matter?

For the last 12 years we have seen the Japanese... Read More

Selling Strategies - Setting a Stop Loss

Sometimes the best way of lowering exposure to risk is... Read More

Dont Buy Stocks based on P/E Ratio alone

I use the P/E ratio as a secondary indicator for... Read More

Trading Systems

To become a successful trader you must have some kind... Read More

Buy and Hold: How to Perpetuate Your Investment Losses

A recent cartoon in my daily newspaper showed two guys... Read More

Money, Insanity and Wall Street

Money: the most charged word in the planet. It means... Read More

Good News?

As the man said, "I've got some good news and... Read More

Stock Valuation using the SMP Model

Disclaimer: Please note that I do not necessarily purchase, own,... Read More

The Club

Yesterday I received my monthly issue of MONEY magazine. This... Read More

Trading vs Investing

I often hear from people, "I don't trade. I invest.... Read More

induction street lighting dimmable led light bulb Pete's produce ..
induction street lighting dimmable led light bulb Pete's produce ..