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Just because it’s finally April doesn’t mean you’ll get caught in the rain. But if you still have your money in mutual funds, you need to put this on your radar:

A tax downpour caused by distributed mutual fund capital gains.  


Capital Gains and the Mutual Fund System  

Poor investing decisions can account for up to 2.5% of the losses you face when it comes to mutual funds. But your investing decisions have nothing to do with high taxes on mutual fund capital gains. The mutual fund system itself is 100% to blame.


Here’s how it works:

After selling securities that have appreciated, mutual fund managers must distribute capital gains to investors.

You can’t control when those securities will need to be sold – and that leaves you vulnerable to a large IRS bill every single year for the rest of your life.


You May Have Dodged the Downfall this Tax Season…

But you never know what’s up ahead.

Unless you sell your mutual fund, you could face egregiously high taxes next year, the year after that, and on and on and on. Whether you live in Monmouth County, New Jersey or across the U.S.

Is it worth jeopardizing your retirement savings simply because the mutual fund system is so terribly flawed?


Don’t Get Soaked – Switch to Stocks in Separately Managed Accounts

Whether you got soaked with a huge tax bill this year or not, you need to think ahead.

Will mutual funds provide the money you need to maintain your lifestyle post-career? What about enough money to buy the dream house or sports car you’ve always wanted?

For most Monmouth County investors, the answer is no.

Luckily, there is a solution: stock investing. Of course, it’s not any old stock investing.

First, you need to invest in stocks of great companies. And second, you need to invest via separately managed accounts.

In my experience, that’s the best way to ensure that any capital gains will be proportionate to your investments.


Stock Investing with ValueAligned® Partners

Making the switch to stocks might sound intimidating, especially if you’ve always relied on mutual funds for your retirement savings. But I can assure you, it truly couldn’t be simpler.

I founded my fee-only investing firm ValueAligned® Partners in 2002 to give investors in Middletown, New Jersey; Red Bank, New Jersey; elsewhere in Monmouth County, New Jersey; and throughout the U.S. the chance to eliminate mutual fund drains on their hard-earned money.

If you’re ready to get started, simply contact me at or 732-800-2375. For even more helpful tips to avoid the pitfalls of mutual funds, sign up for my email list today.


Image Credit: clarita | morguefile