AboutJohn D Smith, CFP Expertise I can answer detailed questions regarding mutual fund investing, retirement planning, education planning and related financial planning/investment issues. I have a B.S. degree in Financial Planning & Counseling. I am also a Certified Financial Planner practitioner and have performed fee only investment management and financial planning services for the past 11 years.
I've been faithfully putting $50.00 a month in a rather agressive taxable mutual fund in the Strong Family of funds.
It's now been almost 4 years and judging by my novice analysis it appears at the moment I am just breaking even...made no money...principle intact at least over the weekend. I was down quite a bit over those 4 years but am even as of today.
Question #1: What's the quickest way to determine a rate of return on a mutual fund?
Question #2: Will Strong allow me to roll this money into other funds without fees?
Question #3: If I were to liquidate the total amount...is there a way to determine the capital gains? And will Strong charge me a fee for the distribution?
WOW...hope I haven't confused you...
Thanks so much!
Cheri
Answer The quickest way to determine your rate of return would be to total all of your contributions and then divide this into the current value and subtract 1. For example, if you put a total of $2000 into the fund, and it is now worth $2500, your return would be approximately .25, or 25%. If it is now worth $1500, your return would be -.25 or -25%.
Since Strong is a no-load mutual fund company, there should not be any fees or penalties for rolling your investment into another fund. However, you should check with them to make sure.
In order to determine the capital gains associated with selling, any distributions (interest, dividends, capital gain distributions) paid since you have owned the fund, whether reinvested or not, have already been taxed. So, in order to determine your cost basis, you need to take the amount you have invested in the fund and add to this the amount of the distributions you have already paid taxes on. These numbers added together will give you your cost basis. The value of the fund which exceeds your cost basis is taxable when the fund is sold.
