News & Ideas

Year-End Advice for Mutual Fund Owners

By: Robert F. Abbott, freelance writer and author of Big Macs & Our Pensions

Usually, when we talk about investment advice, we discuss which stocks or other assets we should buy or sell.

But, there’s another, often critical, component of investment advice worth heeding: knowing what will happen with your mutual fund or other securities at the end of the year.

And, once you know, you need to act as necessary to prevent taxation or other penalties that could reduce your saving. If you own mutual funds in the U.S.A., take note of the information in the second paragraph of the following Motley Fool article:

5 Smart Money Moves to Make Before the Holidays

“If your fund has traded throughout the year and has trading profits, it is required by law to distribute 90% of these profits to its shareholders (see: regulated investment companies). This can be bad if your share price has dropped or not really appreciated for the year since you will be paying taxes on gains but really having losses. An alternative, in this case, is to sell your shares prior to the ex-date of the distribution….”

I’ll admit the language is a bit intimidating if you’re not an accountant or investment broker, but you can likely contact the person or company that sold you your mutual funds. This is something they should know about and help you through.

If you deal with a discount broker, it may be worthwhile to ‘buy’ some investment advice at times like this. A good adviser should save you more than you pay.

And, of course, there’s always the Internet, to which you’re currently connected. I did a quick search for “year-end mutual fund” and up popped an assortment of articles on this very issue.

If you reside somewhere other than the U.S.A., you may or may not experience year-end issues, but I suspect it happens in many countries. Again, the same advice applies, but if you search for the rules in another country, put your country name in at the beginning of the search string above.

The Writer

Robert F. Abbotttop mutual funds is a freelance writer; see his profiles and analyses of value stocks at . He is also the author of Big Macs & Our Pensions: Who Gets McDonald’s Profits?

In this book, you will:

  • Discover the Ownership Revolution, and what it means to your retirement funding.
  • Find out how much of your lunch bill is a profit for McDonald’s, and who gets the profits.
  • Learn how corporate profits fuel one of the greatest social programs ever developed.

Click here to read a free preview at

Robert Abbott

Robert F. Abbott has been investing his family’s accounts since 1995, and in 2010 added options, mainly covered calls and collars with long stocks.In his other writing, Abbott explores how the middle class has come to own much of big business through pension funds and mutual funds, what management guru Peter Drucker called the Unseen Revolution. In Big Macs & Our Pensions: Who Gets McDonald's Profits?, the first of a series of booklets on this subject, he looks at the ownership of McDonald’s and what that means for middle class retirement income.In an eclectic career, Robert Abbott was a radio news writer and announcer, a newsletter writer and publisher, a farmer, a telephone operator, and a construction worker. When not working, he has been a busy volunteer, which includes more than a decade of leadership roles at the Airdrie Festival of Lights, one of North America’s leading holiday light displays. He lives in Airdrie, Alberta, Canada.