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Market Vectors Mortgage REIT Income ETF Message Board

up1.down2 37 posts  |  Last Activity: Apr 6, 2015 9:35 AM Member since: Nov 12, 2008
  • up1.down2 up1.down2 Apr 6, 2015 9:35 AM Flag

    Come on nitwit that was obviously a hypothetical scenario to illustrate folks are paying taxes on their original CAPITAL investment, not INCOME. ? True, banks are not paying 7% interest today but in my lifetime they HAVE.

    And yes, banks don't return Capital (deposits) under the guise of earnings because folks would go beserk if they did. Do it under an Mutual Fund umbrella and a crafty 'return' chart and folks are blinded by what is actually occurring.

    If you take cash out of your mattress you don't pay taxes on the Capital Distribution. If you buy an eBay item for $100 and sell it for $110 you should pay taxes on the $10 income. Maybe you can understand that parallel ?

    Common sense 001 obviously never acquired.

  • up1.down2 up1.down2 Apr 2, 2015 10:40 AM Flag

    worrywart is correct there is no tax write-off. This is the worst aspect about this fund. Many think they are getting some kind of tax 'advantage' when actually they are get a disadvantage. The only thing with the fund that provides any sort of tax benefit is the deferral and that is highly questionable as the theory is a persons late life tax rate will be less than their current rate but with government constantly growing and taxes perpetually increasing that is more a pipe dream than reality.

    Here is the real stinger. If you deposit $100 in a bank and the bank pays $7.00 in a distribution you would expect the 20 cents in interest earned to be taxable. The other $6.80 the bank gives you from YOUR account (ROC) would not and should not be taxable. With the GABUX fund that $6.80 is TAXABLE.

    Peeps are paying taxes on whatever portion of their original investment that is returned to them in the form of 'capital'. This is exactly why the IRS allows these tax 'advantage' funds. The only one really getting a tax advantage is the IRS.

  • up1.down2 up1.down2 Mar 23, 2015 10:18 AM Flag

    More bad advice from the pumping palace? "If you need the extra income why not just sell whatever amount of shares you need each month to compensate the difference"

    Doing this would leave you with ZERO Monthly Distribution and ZERO capital after just 8 ¼ years. Yes, after 8 years ALL your money would be gone and you would NOT get a monthly check.

    Let's say someone started pre split with 5000 shares with .07 per month divi. $350 per month.

    Post split those shares are 2500 or $175 per month divi.
    On the first month you have to sell 17.5 shares (at $10) to make up the $175 dollars in lost divi.

    You now have 2482.5 shares which in the next month only pay $173.77 in divi so you have to sell even MORE shares the SECOND month than you did the first.

    The share count sale EVERY succeeding month must be greater than the preceding month until the is NOTHING left.

  • Reply to

    Prospectus Math vs Real Math - U Decide

    by up1.down2 Mar 6, 2015 1:36 PM
    up1.down2 up1.down2 Mar 19, 2015 8:45 AM Flag

    Is your capital worth LESS today ? Is your monthly dividend LESS this month ? Both 50% or more LESS.

    The answer to these questions leaves no doubt the Real Math is real and the prospectus math is....not real.

    Redo the equations with the now HALF per month dividend. Ouch !

  • Reply to

    Big Clue

    by fredkane3947 Mar 13, 2015 12:39 PM
    up1.down2 up1.down2 Mar 19, 2015 8:30 AM Flag

    More nonsense for the sheeple to follow ? Interest rates headed down ? Huh ? They are ZERO.

    An accountant defines cash as any short term liquid asset.
    The T-Bills that are held in 'Investments at Value' do qualify as cash.

    An investor defines cash as a metric. This metric analyzes a corporation's ability to fund operations. VERY Important metric (or measurable) !

    I thought we were on an investor board, not a CPA blog so effectively a mutual FUND has no cash from an INVESTOR standpoint.

    In a Mutual Fund cash matters little. It's a Mutual FUND. If they need cash for operations they just sell an asset whether it be a STOCK or a T-BILL. No big deal, that do that already.

    A corporation doesn't work that way so cash measurement is critical. In a mutual FUND it means very little. Bickering about how much cash a mutual FUND has is like bickering about how much cash the Federal Government has, pointless.

    Most Ironic thing here is the Fundster pointed out the Float is in T-Bills.
    When T-Bills go astray, this gets worse on another level . Ouch !

    Look at the suckers, it's now back to $5.01 from $TWELVE$ and they are all giddy. If there are this many suckers I should probably start a 'Mutual Fund' myself. Anyone can hand back someone's capital investment. Sad, sad, sad.

  • Another spin from the Fundster (like gangster).

    Getting desperate now, forced to use a PC301 trick. Context.

    An accountant defines cash as any short term liquid asset.
    The T-Bills that are held in 'Investments at Value' do qualify as cash.

    An investor defines cash as a metric. This metric analyzes a corporation's ability to fund operations. VERY Important metric (or measurable) !

    I thought we were on an investor board, not a CPA blog ?

    In a Mutual Fund cash matters little. It's a Mutual FUND. If they need cash they just sell an asset whether it be a STOCK or a T-BILL. No big deal, that do that already.

    Most Ironic thing here is the Fundster pointed out the Float is in T-Bills.
    When T-Bills go astray, this gets worse. Ouch !
    Insert thy foot into thy....

    More lipstick on the pig.

    Beware of the paid cheerleaders.

    Who else would think this is good ?

    Share Price (nav) $TWELVE$ to $FOUR$
    (66% LOSS)

    A Dividend cut in HALF
    (50% LOSS every MONTH)

    A Share cut of HALF
    (50% LOSS of Shares)

  • up1.down2 up1.down2 Mar 13, 2015 8:43 AM Flag

    How many id's are there ? Add robby to the list too. Pathetic that the insecurity runs so high that folks resort to this tactic. Almost every Yahoo message board has one of these who need everyone to believe everything they say and they think this accomplishes it.

  • up1.down2 up1.down2 Mar 13, 2015 8:36 AM Flag

    And I should read the financials ???????????????????

    The last report that GABUX issued shows ZERO 'CASH' on the books, which btw is how a Open End Mutual Fund is supposed to be ran.

  • up1.down2 up1.down2 Mar 12, 2015 8:25 PM Flag

    You are right. It won't actually go to zero. In fact, that short dip below $5 for any Mutual Fund is a rare event since most plans won't touch it below or near $5. This is the SINGLE reason for the R/S.

    After a few more splits, what was once 8 shares becomes 4, then 2 and before you know it you'll have ONE share worth $5, but you were right, won't go to zero.

    Wait until the next R/S it may not be 1:2. Maybe a 1:5 ? Ouch...that will really sting for whoever gets caught in that.

    Remember this started at $TWELVE$ then worked it's way down to $FOUR$. Then a SPLIT. Today it closed at $9.79, which is now HALF the shares, and still $TWO$ Less than where it started. What a deal.

    I never said this was a bad fund to have held for the last 3 years. I talk present and future about the market.
    No point cheering for the past in the stock market. That is just opportunity gone.

    Everyone who bought in the 5's and sold in the 5's over 3 years made money. Anyone holding on for those days might be sorely disappointed.

  • up1.down2 up1.down2 Mar 12, 2015 5:22 PM Flag

    So let me wrap my head around this.

    Your capital is now worth considerably less than when you bought in. This went from $12s to $4s.
    You believe that is a good thing ?


    Your monthly income stream is now HALF of what it used to be.
    You believe that is a good thing ?

    Are you waiting for both your capital and distribution to be zero ??

    Yep it's my bad that I didn't watch the filings after I bought A MUTUAL FUND !
    I thought that's what the fund manager was for ? Oops, my bad again.

    What I did do right was tune back into this circus after receiving that crafty little letter.
    New right away what was up. Went to the latest filings just confirm the worst.
    And Yup, it was.

    Just sharin what I found.

    Very much hope you realize when the NAV goes to zero, so does the dividend....and YOU (or your Estate) will OWE taxes.

  • up1.down2 up1.down2 Mar 12, 2015 12:08 PM Flag

    Yes the NAV stays the same if Acquisition or Liquidation Costs are zero....but they are NOT. That little tid bit always seems to be strategically left out of the equations.

    One or two shareholders exiting doesn't burden the fund with dramatic A/L costs but when they start running for the exits it has a pronounced effect. A substantially large singe shareholder (2% or more) exiting can also have a pronounced effect as the fund manager is forced to conduct multiple transactions to keep the fund balanced.

  • up1.down2 up1.down2 Mar 12, 2015 11:56 AM Flag

    For most folks who invest in an income producing asset the "value" of their investment is the Capital + the Income it generates. If your Income is reduced from that investment by HALF, then the value of your investment HAS changed.

    Anyone trying to tell anyone any different is either being dishonest or is not very good at determining the 'value' of something.

  • up1.down2 up1.down2 Mar 12, 2015 8:41 AM Flag

    for those still proclaiming NAV doesn't change when shareholders sell. True, one person selling doesn't drive the NAV down by $1.00 but I'm almost certain there is much more than one investor leaving this fund.

    If they haven't yet wait until the end of March, beginning of April !

  • up1.down2 up1.down2 Mar 12, 2015 8:30 AM Flag

    March 27th is the date when the 'value of the investment' lie is exposed for those that drank the Kool-Aid explanation.

  • up1.down2 up1.down2 Mar 11, 2015 9:25 AM Flag

    You must be another one that thinks this is a good investment ?

    If you put a market order in to sell 100,000 shares of DUKE that order would put EXTREME pressure on the pricing. This is what would be called a surplus on the supply side. Think about OIL right now. That's why it is 40's per barrel from just $100 last summer. Too Much Supply.

    Same goes for stocks. Too much supply, too little demand the price goes down. That is exactly what would happen with a 100K sell order. At that point just forget about the trading costs, you are right, it becomes insignificant compared to the $$ per share that are lost on the asset value itself. Good grief Charlie Brown !

    If a seller decides to feed the market slowly with a 100k share disposal then they DO pay transaction ffees for each block which then becomes significant. Either way SOMEONE has to pay those COSTS and that would be the REMAINING SHAREHOLDERS.

    This is exactly one of the top ten mistakes retail investors make when evaluating their portfolios. How much the paper statement says I have is what my account is worth ? WRONG. Every single portfolio is actually worth a percentage less off paper that on.

    This is Stock Market 101 stuff. Keep holding this Mutual Fund waiting for something to change that can't. Good luck with that.

  • up1.down2 up1.down2 Mar 10, 2015 11:52 AM Flag

    Of course there is risk in PSEC. There is risk in EVERY stock. I would bet 95 out of 100 people would identify the risk in PSEC to be far less than the risk in GABUX.

    The 5 in disagreement would be the paid pumpers on this board.

  • up1.down2 up1.down2 Mar 10, 2015 11:27 AM Flag

    Assuming you sold those 44k shares for $5 you netted $220k.

    If you go and buy 19,207 shares of a BDC like PSEC you would get that same $1600 per month in income. PSEC currently pays $0.0833 per month in dividends. At the current PPS of $8.57 those shares would cost you $164,603. That would leave you $55,397 in your pocket and still give you the same $1600 in monthly dividends.

    If you put that remaining $55,397 in cash to work in PSEC that would be another $538 a month on top of the $1600.

    I cannot understand for the life of me why anyone would hang onto this. Particularly since even the forward dividend is such a huge percentage of capital.

    The dividend from PSEC is currently fully (100%) covered by EARNED INCOME so the dividend is fully qualified (possibly zero taxes) and won't be eroding the NAV.

  • The basic truth here is most folks buying this Fund buy it and hold it for the income stream. The PAPER value of Shares x NAV is irrelevant for anyone who has or will hold this. That equation MEANS nothing unless you are selling.

    If you put $100K in a 5% corporate bond you would expect to receive $5000 per year in interest. If the bond issuer decided they were going to immediately reduce you annual interest payment by 1/2 $2500 the market would price the bond lower ultimately setting the value at $50K (or less) over the next several months.

    This is exactly what WILL happen here for two reasons. First is, any investor with any brain has, or will be leaving the fund forcing the fund to liquidate holdings at an inconvenient time which will lower the value. Second, the reduction in distribution only slows down the erosion in NAV, does NOT stop it. The fund has been handing out 85% of the distribution in capital. With a 50% reduction that still leaves 35% of the distribution being returning as capital.

    A 35% return of capital (ROC) is still a staggering high amount relative to typical market distributions.

    Since the distributions are the ONLY thing that has made any investment in this fund not a complete loss. Look at the topic "Prospectus Math vs Real Math" and substitute ½ the distributions in that equation and look at the returns. What has been a 15yr 3.1% annual positive return changes to a 15yr 0.3% annual LOSS.

    If anyone tells you the value of you investment does not change they are lying. Your annual income stream is now HALF. That is YOUR value.

  • up1.down2 up1.down2 Mar 9, 2015 4:59 PM Flag

    Impostor !!. There is no way a Fund Manager is posting on the Yahoo message boards as it would be illegal under SEC rules to do so.

    Absolutely disgusting what some low life will do to lure hard working folks into donating money to this sham.

    And contrary to what some may want others to believe this stock split DOES change the total investment !

    Look at the total value prior to the split and after. Did it go up ? No !. There is the real answer.

  • Reply to

    Prospectus Math vs Real Math - U Decide

    by up1.down2 Mar 6, 2015 1:36 PM
    up1.down2 up1.down2 Mar 9, 2015 10:24 AM Flag

    There is a typo in the original post. All calculations were based on a 15 year period. The "Total cash in hand after 10 years = $4157 + $10495 = $14,652" ....should read....Total cash in hand after 15 years...... None of the math changes.

    The $14,652 is cash in hand after 15 years if you liquidate or sell all shares. This includes remaining capital and 15 years of distributions.

    An honest and accurate return on investment (ROI) for any instrument is only meaningful if liquidation is component of the equation. This is especially important for Mutual Fund as most of them have Load Fees than reduce the overall gain. Even discount broker stock trades must have commissions included. If you buy 2 shares of a $10 stock and pay $15 dollars in buy and sell commissions that stock has to go to $17.50 just to break even.

    The $10k is only subtracted from the total cash in hand to determine what the absolute gain in dollars are. You have to remove your original investment from the total cash in hand to determine what your return on the original investment is.

    If you give me $1 and I return $1.50 to you your gain is not 150%, it is only 50% on the original investment. ($1.50 - $1.00) / $1.00 = 50%

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