Capital gains distribution season is fast approaching, and some Vanguard shareholders are going to be finding big lumps of taxable coal in their stockings.
Every December, Vanguard, like all its mutual fund industry competitors, pays out interest, income and capital gains that have accumulated over the year. This isn’t a choice, it’s a legal requirement.
A few weeks back, I explained how even funds that have lost 20% or more of their value can still end up paying large capital gains to shareholders.
My goal today is to give you the information you need to navigate distribution season with confidence. Capital gains don't make for riveting conversation, but they are, nonetheless, very important. So before diving fully into the topic, here are the key things you need to know: