Hey all you smart mutual fund investors, listen up!  Check your accounts on line now, or call your broker or investment company,to see if your fund issued any capital gains this month.  That’s right, even though your fund’s value probably took a nose dive, there very well may have been trading in that fund throughout the year that could have resulted in a capital gain.  Mutual funds distribute the bulk of such gains during December to their shareholders, so you COULD owe income tax on capital gains even though your fund is sporting a big fat loss, or even a mild-paunchy loss…

You see, when a lot of novice or nervous investors call 1-800-REDEEM (that’s a joke, not a real number to my knowledge) fund managers have to raise enough capital by 4pm EST each day of trading to satisfy all the redemptions.  Well, quite a few savers sold out of mutual funds when the markets started declining.  (Generally it’s savers, not investors, that panic and sell prematurely incidentally.)  So, quite a few mutual fund managers had to juggle their portfolios, invariably selling out securities that had built-in capital gains.  Yes, I know, a distant memory…over 6 months ago, even…but I digress.

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