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Many funds have lagged this year. I've lagged as well. Suspect the 50% tumble in oil and hit to producers has a lot to do with it. Some funds like OAKBX like to hedge overall equity risk with positions in energy. Can go either way - but in 2014 that really hurt.
Those with oracle-like powers may wish to offer a prediction here. On December 1, 2015, will the price of WTI be closer to: (1) $40 (2) $60 (3) $80 ?
* It's nice to see David get the recognition. He always makes a great deal of sense to me.
Dex, you're not getting any $ you didn't already have - it was priced into the NAV. Beyond being a convenient way to take out $ for retirement expenses or something similar, cgd's are a tax event only. In a tax-advantaged account, they're a non-event unless you need or want to take the $ out of that particular fund.
Dex, you're not getting any $ you didn't already have - it was priced into the NAV. Beyond being a convenient way to take out $ for retirement expenses or something similar, cgd's are a tax event only. In a tax-advantaged account, they're a non-event unless you need or want to take the $ out of that particular fund.
So, the bad part is that in a non tax advantage account it can be taxed? But, according to the article, funds are required by law to distribute them. I don't see how it is the fund's fault. Thanks for the reply.
Right - I don't see that either. It means the fund made money. Only way I can think of that a particular fund manager could be faulted is if the fund's got a ridiculous level of turnover or the manager committed some obvious screwup in managing its investors' tax exposure.
My bet is that oil (price of WTI per barrel) will be between $70 to $80 by end of 2015. That is why I think buying into energy stocks that are not highly leveraged and energy & midstream MLP ETFs at this time is a winning investment strategy for 2015, with a small but well-defined downside and significant upside.
Yes distributions are a wash except that you end up with more shares after everything is settled. Those shares are a part of the miracle of compounding we hear about. You won't see the benefit right away but over time it does add up.
John, you're not putting new money into the fund with a reinvestment of a cg distribution. You have exactly the same investment you had before, except that you've picked up early tax liability for some of the fund's gains.
Compounding as I've always understood it is putting new money, a little at a time, into an investment. That isn't the case with cg distributions. It is the case with, for example, daily accrual bond funds; each month you're getting an income dividend - new money - that you can use to buy more shares if you choose.
"John, you're not putting new money into the fund with a reinvestment of a cg distribution. You have exactly the same investment you had before, except that you've picked up early tax liability for some of the fund's gains. "
Agree, but I am talking about after the fact. Money wise, it's a wash but you end up with more shares. As time goes on those added shares help to grow the investment. Granted, you need to hold the fund or investment for a period of time.
A mythical example; Say If you bought 100 shares of a fund and never bought another share, and that fund declares distributions regularly. After 10-15 or so years you end up with 120 shares. While you did not make money on those distributions, those extra 20 shares are working for you, hopefully in your favor.
Comments
Regards,
Ted
http://www.mutualfundobserver.com/discuss/discussion/17907/jason-zweig-when-funds-insult-their-investors-mfo-s-david-snowball-comments#latest
Those with oracle-like powers may wish to offer a prediction here. On December 1, 2015, will the price of WTI be closer to: (1) $40 (2) $60 (3) $80 ?
* It's nice to see David get the recognition. He always makes a great deal of sense to me.
I see evaluating a funds performance against the benchmark - that is a separate issue.
I understand the tax issues.
I understand the offsetting mentioned in the article.
But what is wrong with getting $ (unless the fund you bought goal was to minimize LT & ST distributions).
Thanks for the reply.
Right - I don't see that either. It means the fund made money. Only way I can think of that a particular fund manager could be faulted is if the fund's got a ridiculous level of turnover or the manager committed some obvious screwup in managing its investors' tax exposure.
My bet is that oil (price of WTI per barrel) will be between $70 to $80 by end of 2015. That is why I think buying into energy stocks that are not highly leveraged and energy & midstream MLP ETFs at this time is a winning investment strategy for 2015, with a small but well-defined downside and significant upside.
Yes distributions are a wash except that you end up with more shares after everything is settled. Those shares are a part of the miracle of compounding we hear about. You won't see the benefit right away but over time it does add up.
Compounding as I've always understood it is putting new money, a little at a time, into an investment. That isn't the case with cg distributions. It is the case with, for example, daily accrual bond funds; each month you're getting an income dividend - new money - that you can use to buy more shares if you choose.
Agree, but I am talking about after the fact. Money wise, it's a wash but you end up with more shares. As time goes on those added shares help to grow the investment. Granted, you need to hold the fund or investment for a period of time.
A mythical example; Say If you bought 100 shares of a fund and never bought another share, and that fund declares distributions regularly. After 10-15 or so years you end up with 120 shares. While you did not make money on those distributions, those extra 20 shares are working for you, hopefully in your favor.