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aravind | In mutual fund which is the best option - growth/dividend payout/divident reinvestment - now my age is 42? |
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kishorevathana
 |
I assume you are an Indian with Indian IT (Tax) scenario to deal with. Your AGE should not be a matter of concern as you still have more than 15 years for your retirement.
With these assumptions,
For equity schemes, if you hold for more than a year, growth is preferable, as you can sell all your units with paying any tax.
For equity schemes, that is held on a short term basis, dividend option are preferable. Thats because once you obtain a dividend, the NAV for the fund drops by the amount of dividend paid. Hence when you sell your initial units that you purchased from the fund, you are most likely not going to pay the short term capital gains tax - because even though market may have gone up, the fund declared dividend and reduced its NAV so that you can show a loss or much lesser profit for Short Term Capital Gains. However, do remember that there are dividend strip-ping rules that are a hindrance to entering and exiting at will into a Dividend based MF just to obtain the benefit of the dividend and book Short Term Capital Gains.
If you want to mimic the Growth option without paying too high a short term gain tax, then opt for Dividend reinvestment scheme.
For debt schemes, growth option is preferable, because the tax on dividend distribution (13.2% ??) is higher than the short term capital gains tax. |
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dinu_pawar
|
first no to MF
trade in index commodity future
in MF ur capital, taxing, target, etc to be consider
4 small amt gr, tax saving div, short term gr
long term 4 child gr
do diversification
details on my blog |
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mory k
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dividend is ideal so go ahead ,happy investing!!! |
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jebediabartlett
 |
If you have to pick only one...go with div re-investment.
It might be a tad cautious, but you could get a very good return in a fund like Fidelity's FNMIX...it's fairly cautiously invested in the bonds/ financials of world markets and it pays a monthly dividend.(Every month a few more shares...and before you realize it, you have 30-50 percent more shares than you started with !! and worth more !! and getting more shares every month( 18 this month...21 next...24 after that...etc)
You've got about 20 years 'til retirement? " Dividend re-investment" will get you a bundle....and doesn't need constant attention. Some more info at: http://www.dividenddetective.com |
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Rob D
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At your age, I'm assuming you have a ways to go before retirement. Reinvest the dividend. The harder your money works, the less you'll have to. |
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ramcam
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Considering the present financial times you can confidently go ahead with a growth option that too in a mutual fund for atleast a year. You can always change over to other options later on depending on the financial scenario. Bye.Please feel free to ask more. always feels great to help friends the right way. |
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Rahul
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If you are investing for a long term, then growth option is better, because long term gains(holding for more than one year) are tax free. |
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?
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Vanguard Equity Income Fund. Pays a div every 3 months and about 11 to 12% return per yr. Go to Vanguard . com |
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Gilchrist
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u still havent invested in mutual fund...y oh y? |
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Frank Castle
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Growth.
If you don't smoke it is likely you will live for another five more decades. |
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