I don't use a broker to ask questions too and you guy's on tis board seem very knowledgeable so my question is if one invests say 10,000 dollars in WHZ and collects the dividends until the Trust Expires is the amount still invested just mdisappear or is it returned to me??? Thanx for any help!!!!
Yes, when the trust runs out, you will recieve what is left of your principal back. At some point, part of your dividend will be part principal, and part gain, which means that at the end you won't get back your total investment, but what was not passed on to you on a quarterly basis.
I only plan to keep this trust for about 5 years, since the gain will grow smaller each year. Ater 5 years, I feel like my money will be better invested somewhere else.
"Yes, when the trust runs out, you will recieve what is left of your principal back. At some point, part of your dividend will be part principal, and part gain, which means that at the end you won't get back your total investment, but what was not passed on to you on a quarterly basis."
What on earth are you saying?
It's quite clear. When the trust 'runs out' (as you put it), your unit are worth zero.
Think of it this way, you are buying oil and gas in the ground, As that oil and gas comes out of the ground and sold, you get paid. The day will come when the oil and gas you bought is gone. So if things go right, you will have all your investment back plus a profit.
and it sunsets on the second of two conditions, the date of expiration or the volume promised.
This is important. Take your initial investment which today would be close to 14/unit and divide by the number of distributions remaining, around 36. That is your straight line depreciation, or return of capital in each dividend. Anything above that is gravy. So figure you need significantly more than .40 per quarter to make this worth while. so the annualized yield for a person who manages to buy at 14 is about 1.00/yr[that is what is left over after return of capital] or 1/14 = 7% Not a great deal until Whiting stops ripping off the trust holders by making them pay for costs associated with other operations. this cost shift has cost us .30/unit each quarter, which would have made this a very attractive investment..
That the best analogy. It is like a gas station. The owner, you, has gas for sale. As long as you have gas for sale, you make a profit. Once there is no more gas for sale, you are done. No more money coming to you.