i'm talking about a no load fund with very small expenses. Dodge & Cox International.
2007-11-30 11:12:28 · 4 answers · asked by orangefouch 1 in Business & Finance ➔ Investing
Mutual funds often make dividend and capital gain distributions late in the year. If you buy just before they do, you might wind up paying tax on them when you didn't reap the benefit of being invested in the fund during that year.
If your fund is in a (tax-deferred) retirement account like a 401(k) or IRA, the question is moot.
2007-11-30 11:17:44 · answer #1 · answered by Anonymous · 4⤊ 0⤋
In addition to paying taxes on the distributions the price drops to account for the payment. You just get your money back,. When brokers encourage buying stocks or funds at the end of the year based on the distribution, its called "selling dividends"
2007-11-30 23:32:53 · answer #2 · answered by jeff410 7 · 0⤊ 0⤋
At the end of the year mutual fund companies declare and pay the dividend. They also make a distribution which will distrubute more stock and lower the price.
The catch is that you must pay tax on the dividend and distribution, which in reality, you'd be paying tax on your own money.
2007-11-30 19:19:18 · answer #3 · answered by beckoningsubstitutes 5 · 2⤊ 0⤋
all a matter of taxes -- you will end up paying taxes on dividends also when the fund make out dividends the price of fund will drop and so if you wait you can buy at a cheaper price!!!!
2007-12-04 16:19:20 · answer #4 · answered by mister ed 7 · 0⤊ 0⤋