Liquidating mutual

20-May-2017 20:35

Mutual Funds Are Not Stocks The first thing you need to understand is that mutual funds are not synonymous with stocks.

So, a decline in the stock market does not necessarily mean that it is time to sell the fund.

Mutual funds are assets that are subject to capital gains taxes just as stocks are.

liquidating mutual-16

This forces investors who bought when the fund was more expensive to sell at a loss.

For investors, this means that although the stock may have been purchased by the fund before some investors bought in, tax liability for those gains is not passed on to investors until the stock is sold and the gains are realized and paid into current shareholders' accounts.

If your mutual fund is yielding a lower return than you anticipated, you may be tempted to cash in your fund units and invest your money elsewhere.

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This forces investors who bought when the fund was more expensive to sell at a loss.For investors, this means that although the stock may have been purchased by the fund before some investors bought in, tax liability for those gains is not passed on to investors until the stock is sold and the gains are realized and paid into current shareholders' accounts.If your mutual fund is yielding a lower return than you anticipated, you may be tempted to cash in your fund units and invest your money elsewhere.Please register to participate in our discussions with 2 million other members - it's free and quick!Some forums can only be seen by registered members.B shares typically charge a fee on sales that declines depending on the time you have owned the fund.