|Stocks & Mutual Fund Information|
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.
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Mutual funds were created with the idea that one person can specialize and manage the investments of a large pool of money from multiple investors. Before the great depression mutual funds were called investment pools and mutual fund managers were called pool operators. The bull market of the 1920's created a time of economic prosperity akin to the 1990s. The conceptualization of the pyramid scheme occurred at this time as well.
How to Evaluate Load vs. No Load Mutual Funds
If you have been dealing with mutual funds for any length of time, you undoubtedly have faced the question of which is better: Load Funds or No Load Funds. If you are new to investing, "load" simply refers to the commission paid to the broker selling the fund. "No load" means there is no commission on the purchase or sale.
Keep Your Profits
It looks like we have now entered a new bull phase in the stock market and I have a question for you. Will you give back the profits that you make this time as you did in 2000? You sure don't want to, but you are not going to get any help from your broker.
Even if you don't own any of their stock or any stock at all you will want to read this.
Right now there doesn't seem to be any "gold fever". Very few are out looking to strike it rich in this sector.
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Sidney felt sick as she looked at her latest OptionsXpress trading statement. In just 8 months, she had managed to turn her $120,000 account balance into less than $70,000.
Precision Money Management
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Invest In The Stock Market For The RIGHT Reason, Using The RIGHT Choices
Invest in the stock market for the RIGHT reason, using the RIGHT choices!
The spring-loaded rat catcher is the ultimate low-tech device invented more than 100 years ago and remains the best demouser in the world. It is so simple anyone can master it and best of all you can keep on using it year in and year out. It always works.
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"Buy and hold" is one of the most heralded investment strategies promoted today. "Buy and hold" is also one of the few investment methods where you are guaranteed to lose money 2 out of every 5 years...so why do it?
Whenever I see mutual fund comparisons in the trade publications and in the financial section of the newspaper they almost always mention a specific fund and tell you how good it is in relation to its peer group. A peer group is a specialized sector of mutual funds that all invest in about the same type of stocks or areas of the world or size of companies or some such categorization.
In 1960 an engineer working for a watch company in Switzerland discovered that a small crystal would vibrate at a constant rate. He found this was so accurate that it could be used to calibrate time so he took it to company management and said it would make an entirely new kind of watch that had no springs and no gears. They could not imagine who would want such a thing. Swiss watches dominated world commerce. "Why change?", they said. The bosses did not even bother to patent it.
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Disclaimer: Please note that I do not necessarily purchase, own, or partake of any of the securities or other financial instruments mentioned in this article. I also do not take any responsibility for any actions resulting from any actions taken by anyone who reads this article. You are responsible for your own finances - no one else. Do your yown due diligence when researching financial matters.
You have a lock on your house. You have a lock on your car. You have a lock on your tool shed. Do you have a lock to protect your stock market investments?
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The Skinny on Mutual Fund Investing
Mutual fund investing is a lot like Thai cooking. Everyone has heard of it, most know a little something about it, but very few actually know how to do it and do it well. To invest in mutual funds wisely, it is important to have a good grasp on what mutual funds are, how they work, and what the risks involved may be. The fact that mutual fund investments are often considered safer than stocks, options, and other investments often misleads people to think that their investment in mutual funds are risk free. This, as you will see, is not the case.
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