make sure you are prepared for this little IRS 'angle' ...
(snip)"Dec. 1 (Bloomberg) -- Investors in the $4 billion Templeton Foreign Fund already have lost more than 50 percent of their money this year and now they’ll be forced to pay taxes on as much as $1 billion of gains from the sales of investments.
Shareholders of Templeton Foreign, run by Franklin Resources Inc. in San Mateo, California, have plenty of company. Franklin said 33 of its 106 stock and bond funds will have capital gains. Fidelity Investments, the world’s largest mutual- fund manager, expects 135 of its 212 funds to make the distributions, based on data as of Nov. 15.
Money managers have had to sell profitable holdings this year as customer redemptions increased, resulting in short- and long-term capital gains. The result means tax bills for investors in the worst year for financial markets since the 1930s.
“It feels like a sucker punch for investors to pay taxes on gains when you’ve lost so much money,” said Christopher Davis, an analyst at financial researcher Morningstar Inc. in Chicago.
The last time investors were hit with capital gains during a losing year was in 2001, when they paid $9.9 billion in taxes on fund distributions after the collapse of the Internet bubble, according to Lipper & Co., a Denver-based financial-research firm. In 2001, the Standard & Poor’s 500 Index declined 13 percent, compared with 40 percent this year. "(snip)



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