Debt Free Article
Top Ten Mistakes People Make When Investing
Mistake #10
Paying income taxes on someone else’s capital gain
Most mutual funds charge their shareholders on a particular date in December, passing along their proportionate share of all the capital gains that the funds have realized from selling assets all year long. The result: You gain immediate taxable income without increasing your shares’ value. To steer clear of this issue and avoid it all together, you need to find out when the fund posts its gains for the year. Once you know when it posts, you then buy your shares after that date. In essence, you are not paying income taxes on someone else’s capital gain and you are learning to be a shrewd investor.
Here is a little information about mutual funds:
Mutual funds are one of the most appropriate means of investing for many people. Successful investing requires time, effort and understanding (as you already undoubtedly know by now. You have to spend time figuring out your objectives and designing an investment strategy to meet them. But, you do not necessarily need to spend the considerable amount of time and energy required to search for investment opportunities and to monitor the achievements you have chosen. Instead you can have a pro investment manager help you in implementing your investment strategy. Just remember a persona investment manager can be hard to get if you are not investing tons of money.
Here is where you can obtain more information about mutual funds:
- Morningstar Mutual Funds. This is an amazing cornucopia of mutual find info on more than 1,300 funds. It is updated a couple times each month. It costs though. Each year you are looking at a $400 fee. You could get a page at a time for a much smaller fee of $5 each, but if you are investing a lot, it is more cost effective to do the yearly thing.
- Investor’s Guide to Low-Cost Mutual Funds. This is a very detailed selection of information regarding mutual funds and the updates come out about every 6 months. It is cheap too. About $5 a copy.
- The Value Line Mutual Fund Survey. It contains Information on nearly 1,500 well known funds and even has coverage of about 500 of the newest funds available today. It is updated about every 4 months. For the year, it costs about $300. So, you are looking at a hundred dollars an update here.
- Directory of mutual funds. Data on about 3,000 funds, so it is a big. There is not any performance info in this though. It costs ten bucks each year. It comes out once a year too.
- Standard and Poor’s/Lipper Mutual Fund Profiles. This is a data base of about 750 funds that gets updated every 4 months. It costs about a hundred and fifty bucks each year.
The more you begin to understand about these great investments the better off you will be. Just remember not to fall into paying income taxes on someone else’s capital gain when it comes to investing.
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