Quote:
Originally Posted by roob1
I invested 200K in a Vanguard mutual fund, and at year's end (2021 and 2022), it was valued at approx. 165K. Both years it was reported I had about 10K in capital gains. How can I have capital gains (and tax liability) when the investment value is less than I invested?
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OUCH. Last year, 2021-2022,the S&P lost 18.11% You can think of that as average loss. In a fund, any fund you pay a fee to the manager and staff. Easy to research, you want to decide if the manager and staff are worth what you pay them. In a down year, a managed fund should do better than a simple average.
To buy the s&p there are several ETFs that simply track the average.
SPY is one.
As far as Vanguard, they are traditionally the lowest fees and they claim, probably true, lower fees means higher net returns. I would call Vanguard and ask about Admiralty shares. You would think if you qualify you automatically get
Admiralty shares, I'm not sure that is so. Admiralty shares to qualify, some funds it is 50,000 some are less. Again you can research this on the internet.
It is the same fund but the management fee is roughly 30% lower.
The MATH. Many people do not understand math. For me I have to do it on my calculator to see. If, you had 10,000 and lost the average 18.11% you now have 8189 to get whole you need to make 8189 plus 23%=10072.47.
What to do? Beware of people offering advice. What is in it for them? I do not offer advice. Based on experience, if it works out well the person who did what you told them will brag how smart THEY are. If, they loose money, YOUR advice is poor and it is your fault they lost money.