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Mutual Fund Taxes Are a Drag

     An often forgotten element of mutual fund investing is that every year about this time funds will distribute capital gains and dividends to the the fund’s shareholders. In some cases the capital gain distribution can be as much as five to ten per cent of a funds share price even in years when returns are flat or down.  Like this year.
    The effects can be especially harsh now that top tax rates have risen and the 3.8% tax on net investment income is in play. There are ways to minimize the pain including, careful selection of funds, choosing the right vehicle to own funds and harvesting any losses in a portfolio.  Here is a link to a recent article in the New York Times that sheds more light on the subject.
    If you have questions about this or anything else related to your financial life, please don’t’ hesitate to give me a call.

About LPL Financial
LPL Financial (Nasdaq: LPLA) was founded on the principle that the firm should work for the advisor, and not the other way around. Today, LPL is a leader in the markets we serve,* supporting nearly 20,000 financial advisors, and approximately 800 institution based investment programs and 500 independent RIA firms nationwide. We are steadfast in our commitment to the advisor-centered model and the belief that Americans deserve access to personalized guidance from a financial advisor. At LPL, independence means that advisors have the freedom they deserve to choose the business model, services, and technology resources that allow them to run their perfect practice. And they have the freedom to manage their client relationships, because they know their clients best. Simply put, we take care of our advisors, so they can take care of their clients

*Top RIA custodian (Cerulli Associates, 2020 U.S. RIA Marketplace Report); No. 1 Independent Broker-Dealer in the U.S (Based on total revenues, Financial Planning magazine 1996-2021); No. 1 provider of third-party brokerage services to banks and credit unions (2020-2021 Kehrer Bielan Research & Consulting Annual TPM Report); Fortune 400 Company as of June 2021. LPL and its affiliated companies provide financial services only from the United States.

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