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Strategies & Market Trends : A.I.M Users Group Bulletin Board -- Ignore unavailable to you. Want to Upgrade?

To: LemonHead who wrote (7166)	3/31/1999 8:24:00 AM
From: Bernie Goldberg	Read Replies (1) \| Respond to of 18928

Hi Keith, I will try to answer your questions on GSF. Tom has had much more experience with it than I. Her 1st objective is to place enough money in a secure holding that will enable her to draw an annual income of $12,000. Right now GSF is selling at a bigger discount than it was when we last talked about it. It is currently yielding 11.61%. With that in mind an investment of $100,000 would yield $11,610 annually. I personally am to conservative with my retirement money to put that much into one vehicle at one time. It would call for you to buy 13,132 shares of GSF to get $12000 annually. I would recommend splitting your income needs into thirds or fourths and making purchases of other closed end funds as well as GSF. If you go to site-by-site.com you would be able to download and review an 18 page list of all the CEFs in existence. There are other income funds that are similar to GSF and sell at comparable discounts. One that comes to mind is RCS. I diversify even further. I have funds for income in HR which is a REIT, RCS, and GSF. HR also pays a dividend of about 11% although it pays it quarterly. You only get it 4 times a year but it's four times as large. Regarding dividend reinvestment. What is this telling me? I assume that you don't get cash payouts and shares too? I have experience both ways with GSF. You have two choices. If you choose dividend reinvestment, every month when GSF declares a dividend an amount of money comes into your investment account. Your broker will then purchase shares with those $$. Some brokers charge for this, most do not. I know that Waterhouse, Jack White and Charles Schwab for sure do not. Example: You own 1000 shares of GSF which pay a dividend of .074 cents per share monthly. GSF sends to your broker $74. If you are on dividend reinvestment your broker purchases (assuming an $8 price on that day) 9.25 shares of GSF for your account. These 9.25 shares will then earn you more of a dividend next month. If you are not on dividend reinvestment your broker will either send you a check for $74 or put it in your Money Market fund. The choice is yours. During the year the fund issued 72,673 shares in connection with the dividend reinvestment plan. What is this telling me? These are shares that were reinvested for people in the previous year as in the above example. Hope this answers your questions. Bernie