Dividends/Capital Gains

[jebmke]

True, but there is another benefit for some -- including ourselves last year.

It was our first year of RMD and we switched all of our charitables to QCDs. Formerly these donations were enough to put us solidly into itemized deductions, comprising maybe half or more of our deductions.

By moving the charitables to QCDs, and because of the tax law changes, we were able to use the standard deduction for the first time in decades. Itemized deductions totaled only about half of the standard deduction so effectively we got a "free" deduction to the extent the QCDs let us underrun the standard deduction amount.

Indeed. Many people don't have enough medical to get past the 7.5% threshold so that typically leaves SALT and charity. With SALT capped at $10K, that means a joint filer would eat up $16.6K of charitable just to get to the same level as a standard.

 

[jazz4cash]

I have been trying to tell folks who are still in the work force to diversify from putting everything in TIRAs mainly because of the tax implications at withdrawal time. Do enough to get the company match, and then the rest to RIRA, municipal bonds, and qualified-dividend investments for income. Capital gains geared investments round out the diversification also with a bit in investments that generate non-destructive ROC (AMLP used to be like that). Gabelli Asset Trust is perhaps though one of the best examples of the latter as its payout has been 10% as long as I can remember -- mostly ROC and some capital gains.

That Gabelli Fund (GAB) looks interesting but I read a summary stating for 2019 75% of the distribution is return of capital. To be clear it is a managed payout closed end fund.

 

[ERD50]

Apologies, two things: 1) I should have said Gabelli Equity Trust, and 2) It is a closed-end fund. The ticker is GAB.

Here's the website. Mario Gabelli is an old hand. When he steps down, I will probably exit the fund.

https://www.gabelli.com/funds/closed_ends/-111

OK, GAB - what's the attraction?

Here's a total return chart (set the slider bar to "ALL") - GAB under-performs the S&P, dipped further in the 2000 and 2008 crashes. I see nothing good there (chart goes back to Jan 1999).

From the 2008 highs, while S&P dipped about 52%, GAB dipped an astounding 73% ! Yikes! And that dip was from a lower peak than the S&P. Double Yikes!


The only way you can make it look good at all is to slide the bar to the bottom of the 2009 dip. It dipped so much further, that its recovery looks good compared to the S&P. But you would have had to time it just right:

https://stockcharts.com/freecharts/perf.php?SPY,gab


I don't see the attraction. No thanks!


-ERD50

 

[OldShooter]

... I don't see the attraction. No thanks!

I have mentioned this before but I think it's appropriate here -- one of the things I tell my students in my Adult Ed investment class:

Rule of Thumb: The more complicated an investment product is, the more likely it is that it was designed to make money for the seller, not to make money for you.
​

Just for grins I pulled up the prospectus for the fund(https://www.sec.gov/Archives/edgar/data/794685/000119312516521462/d150494d497.htm). Over 100 pages and the word "fee" appears too many times to count. The chairman of the board is an "independent director" who is 82 years old and his sole employment appears to be serving as "independent" on 36 Gabelli boards, for which he earned a total of $410,000 in 2015. Truth be told, this is probably more common than exceptional in the industry but skimming this prospectus would not make me invest even without seeing @ERD50's research.

I will award a giant virtual stuffed teddy bear to anyone who can read the prospectus and tell us the total fees paid by its shareholders.

 

[bingybear]

has the op of this thread left as a troll?....pages back?