Tuesday, August 30, 2011

THEY MIGHT NOT MAKE MONEY BUT YOU STILL MIGHT HAVE TO PAY TAXES

Just finished reading a new prospectus from one of my former holdings, which only convinced me that I was right to get rid of my shares.  Prospectuses can be a slow read to say the least, but this one really took the cake.  It involved the same list of investment risks as other prospectuses normally contain, but was written in such a way as to imply the company has never really made any money,  they don't really try very hard to make shareholders any money, but you still may have to pay taxes on distributions as if you had made money.  Granted, paying taxes on some fund distributions even though you've actually suffered a loss, is not unheard of.  However, the blatant way in which these guys came right out and said they weren't really trying to make shareholders any money and were still going to charge a management fee, is either the height of honesty or audacity, I'm not sure which.  Glad it's no longer part of my investment portfolio. 

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