Yes, "Don't Chase Yield" is very good advice. Some believed the gabux yield was 15% but ROC is never used when calculating yield. This is because ROC is viewed by the IRS as "Non-Dividend Distributions" and not taxed. So when calculating the yield, the income portion of the distribution has to be divided by the price. At last look, the total income for 2014 was 0.066 which equates to a yield of 1.26%.
Some might say you sold prematurely and will miss out on the next two "Dividends". But in reality, since the majority of the distribution is ROC, you can just pull any amount you wish from your sale proceeds. If Gabelli can hand your money back, you can hand it back to yourself as well. Plus now that you have sold, you don't have to worry about further NAV erosion since your funds now reside in your core account fixed at $1.00 per share.
I think everyone here has learned good lessons --blame it on greedy fund managers, ROC, Oil Prices, or just bad luck, getting 1/2 the distribution on a falling knife is a rude awaking.
Best of luck to you and your future investments. You might want to consider a DOW, S&P, or NASDAQ Index in the future. During a good year if you realize some capital appreciation, you can offset the gains with your recent losses. You can also claim a $3,000 offset on your tax return in 2015 if you have earned income. Otherwise, all capital losses are carried forward year to year.
Also, 41.5% of the portfolio makeup are junk bonds. Not something you want to own if the Fed decides to raise the short rate. The pps was up 11% last year but down 6.55% YTD. I'm not saying this is a bad CEF, just be aware of what you are buying and be sure it fits your objective and risk profile.
As long as you know what you are buying. NCZ is a different animal, not classified as "Tax Advantaged", and pays no ROC. The distribution is "income only" selling at a 12% premium to NAV and pays .085 monthly. Of course since it's all income, you'd have to pay dividend tax regardless if you hold, sell, or reinvest.
NEW YORK, NY--(Marketwired - Jan 5, 2015) - Resource Capital Corp. (NYSE: RSO) (the "Company") today provided Adjusted Funds from Operations ("AFFO") and dividend guidance for 2015. In reviewing its budgets and expectations for 2015, the Company currently expects AFFO to be between $0.70-$0.80 per diluted common share. The Company plans to distribute approximately 90% of AFFO and, accordingly, currently expects to distribute between $0.64 - $0.72 per common share in 2015.
Resource Capital Corp., a diversified real estate investment trust, primarily focuses on originating, holding, and managing commercial mortgage loans and other commercial real estate-related debt and equity investments in the United States. The company invests in commercial real estate-related assets, including first mortgage loans; first priority interests in first mortgage real estate loans; subordinate interests in first mortgage real estate loans; mezzanine debt; commercial mortgage-backed securities; commercial real estate; and residential mortgage loans and mortgaged-backed securities. It also invests in commercial finance assets, such as senior secured corporate loans; asset-backed securities; debt tranches of collateralized debt obligations and collateralized loan obligations; structured note investments and residential mortgage-backed securities; middle-market secured corporate loans; and preferred equity investments. The company qualifies as a real estate investment trust (REIT) for federal income tax purposes. As a REIT, it is not subject to federal corporate income tax to the extent that it distributes 90% of its REIT taxable income. The company was founded in 2005 and is based in New York, New York.
With gabux, the pay date does not necessarily mean you will receive the distribution on that date. They blame the delay on the Transfer Agent.
I see my imposter shadow with the Ecuador fixation is back using mintwaxed1l5. What's the matter slime bucket, your XBOX 360 broken again?
vpsqdrn - A few trade symbols had surfaced on this message board surrounding attractive pricing of LINE and possible energy alternatives. Of which ARP and MEMP are both limited partnerships (LP). As a point of general information with respect to LP's, I started this new thread to point out the potential hazards of UBIT or "unrelated business income tax" associated with owning LP's in an IRA account. Unfortunately, the long tentacles of the IRS are in every pocket. I hope this helps clarify my intent.
Re: Covered vs non covered (under new tax law) Yes, I'm in tune with that aspect. My oldest tax lot is in 2013. Prior to that under the old law, I sold the entire position and started anew.
Yes, you're right. They want to keep the tax code as complex as possible so few people understand it. This is because there are special provisions in the tax code depending on who you are and who has the best lobbyists.
Personally, I would like to see just one point of tax collection and that would be at the cash register. The revenue collected from a single source would then be proportioned out to various government leaches like schools, local, state, and federal.
The end result would be those that have the most resources and spending the most money would be paying a fair tax based on spending rather than property ownership or punishment for working, saving, and investing. Paying at the cash register would catch the underground economy such as money paid under the table to illegal immigrants, drug & moonshine dealers, prostitutes, smugglers, and any other unreported income sources. Unfortunately, it would not cover undocumented gains made by Ferguson looters. Hands down, tax policy often makes you feel like you can't breathe.
Yes, you are correct --the three tax lots in question are lots 1, 2, and 3 that are all long term. Fidelity has an area called "cost basis tracking" with a choice of 11 different disposal methods for stocks/ETF, Options and Fixed Income. Luckily for mutual funds, the choices are simpler and limited to just two: "average cost basis" or "actual cost basis" with a fixed disposal method of FIFO (first in, first out).
I decided to elect actual cost basis since every purchase I've made had a declining price. As for the balance of your comments, we're on the same page and in full agreement. Thanks for contributing.
Thanks. I took a look at Memorial Production Partners LP per your suggestion. In the past, I've had a lot of problems calculating taxes and depreciation with oil & gas limited partnerships. Therefore, I've been doing the duck walk around those types of investments.
The daily price swings are of little importance. This is a tax-advantaged mutual fund designed to be held long term. The tax advantage is realized because you decide if or when to sell shares when the prevailing conditions are in alignment with your tax objectives. In years with no sales, you have no tax because ROC is not taxable, there are no dividends, and the 1 cent of "income" normally becomes a "qualified dividend" vs "regular dividend" and is taxed at 0% unless you are in a high tax bracket. The only exception is during years when trades (portfolio turnover) executed by the fund manager creates passed-through short or long capital gains. Gains of this nature are always paid by the investor in taxable accounts. The fund manager normally tries to offset portfolio gains with losses to minimize passed-through tax obligations.
Focusing on daily price swings only serves to waste mental energy and cloud long term objectives.
Your reward for owning a mutual fund with a declining NAV in a tax sheltered account is to pay regular income tax on any withdraws as there are no provisions for dealing with capital loss.
I just did a google search on "gabux expense ratio" and a chart appeared. The steady NAV erosion is starkly visible however, even with an expense ratio of 1.37%, it's showing a YTD return of 6.26% with a yield of 8.54%. Personally, I would be more comfortable if the NAV would remain somewhat flat. As the old saying goes "you can't have your cake and eat it too" and with gabux, we're eating a large chunk our cake with every 7 cent distribution.
Yes indeed. Linn Energy has descended below the lower Bollinger Band. I'm going to watch this puppy and if it hits $10, will commit some $$$.
One other disadvantage of holding a tax advantaged fund in a tax deferred account is that any capital loss suffered in a tax deferred account can not be claimed as a loss or added to carry forward loss. With a traditional IRA gains and losses are not reported. Then you still have to pay regular income tax on withdraws.