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 What are some goods stocks to invest in? please answer ASAP.?
i am in highschool and doing a project in which i am getting one hundred thousand dollars (fake money) to invest in stocks. so if you can help me choose at least five it would be GREAT!!!!!!
A...


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Minion26
Why did I receive capital gains without selling?
I have a mutual fund and just noticed I received capital gains (which were automatically reinvested) on it at the end of the year. I thought realized capital gains were the result of selling, which I did not do. Can someone explain to me how this works? I'm new to investing and am trying to figure it all out.
                     
 




Lebnani
Rating
Long answer:
Mutual Funds, are legal entities representing pooled investments in which you are a shareholder and the fund by US law is required at a set date to return to the shareholders 90% of the capital gains (where the sale of a which has grown in value will create some profit) including dividend income. So the fund itself will sell shares/assets, but that is seperate from the share that you own.
i.e. You own 2 shares of Mutual Fund A. Mutual Fund has a basket or portfolio of 10 stocks, it sells 8, makes a profit of $100. You still own part of Mutual Fund A, the 2 shares, but since Mutual Fund A has made a profit of $100, you get some percentage of that depending on how many total shareholders there are.

Short answer:
Legally the Mutual Fund has a date which they return to investors profits.

Extra information, but gives you some context since your new to personal investing:

-You will not inccur any capital gains tax, if this mutual fund is heald in part of you 401(k)s, IRAs or Roth IRAs account.


jeff410
Rating
The mutual fund sold stocks, which they made a profit on. The profits are distributed to the mutual fund shareholders at the end of the year. And they are taxable whether or not you take them in cash or if they are reinvested.


Common Sense
Rating
This is done because of federal law. The Mutual Fund company must "distribute" 90% of all earnings each year.

The "gains" are from sale of stocks/bonds that have made a profit. Some funds like the S&P500 Index Funds have very little distributions because they "buy and hold" most of their stocks.

Your mutual fund company can explain this in depth if you need to learn more.

BTW: Kristy's answer is totally wrong. Be carefull of the advice you get on Yahoo Answers. Many people don't know what they're talking about... others may just want to take your money.


ranchoghar
Mutual Fund Managers buy and sell various stocks in the mutual fund protfolio on a regular basis. Any gains from these transaction could generate capital gains though you have not sold your mutual fund shares.


Cheers
This is dividends come out from your mutual fund. And the dividends will be automatically reinvested. Please be noted that dividends are taxable upon withdrawl.


Sonu G
The mutual fund sold stocks, which they made a profit on


SargentNG
Sounds like either you were paid dividends and they were reinvested for more shares of the mutual fund, which is taxable, or the mutual fund sold some shares of some stock it has and "distributed" the gains to the mutual fund shareholders, also taxable. Both are normal. In the second case, the mutual fund has realized capital gains by selling stocks in its portfolio, which means the mutual fund shareholders have realized capital gains.


It's me
Rating
If you didn't sell AT ALL an only received reinvested dividends/interest you shouldn't have had a capital gain. There could quite possibly be an error

I'm sure you are dealing with a very reputable company, but beware, there are a lot of scams out there. A very common thing is to go to a company who invests in foreign real estate or currency. THey will send you statements saying all the money that has been reinvested into your account, but you usually never actually see a check, by the time people figure out that it is a scam, the company has moved on to it's next victim/location


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