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Strategies & Market Trends : A.I.M Users Group Bulletin Board

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To: OldAIMGuy who wrote (4742)	5/21/1998 11:37:00 AM
From: Bernie Goldberg	Read Replies (2) of 18928

Hi Tom, You have to pay taxes on any dividend that you receive reinvested or not. With mutual funds like Ultra however the taxes are much higher. i read someplace on the web that Ultra is anticipating a 30% distribution this year. Assuming a $10000 investment in Ultra that would be a $3000 gain. Assuming that it is all long term which probably won't happen, there would be $600 in taxes due without selling any of your position. Most of Ultra's stocks don't pay dividends so if you owned the same stocks and didn't sell anything you wouldn't have any taxes due. If you invested $10000 in the the Foolish Four ( the lowest priced highest yielding stocks in the DJ 300)you would receive about 2.6% in dividends. Assuming a 28% tax bracket that would be $72.8 in taxes. That's why I am considering dropping my funds and putting the $$ in the Foolish Four. I've been doing between 25% and 34% over the last four years and paying less in taxes. Besides it's given me stocks like MRK and DD which provide the terrible problem when I AIM them that they don't go down enough. I complain about that but only out of one side of my mouth. the other side seems to be smiling all the time. Bernie

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