Anybody besides me taking a big hit out there?

Tax driven company business decisions aren't good long term for the economy and no other country has allowed such preferential tax treatment for i. trusts.

It was something that needed to be done but there is a lot of carnage out there as a result of this unexpected move. It's a shame so many investors took one big punch so hard on the chin though.

Mayhem in the market today made for unhappy investors however it could be considered a good buying opportunity.

 

I've got a chunk of Sceptre Income Trusts mutual fund. Any word on the long term impact on investments like this? Time to bail?

 

^ too late, the damage is done. Overall the trust index dropped about 15% today on the TSX. There was about 25 billion $$ trimmed from the 250 Canadian income trusts out there today to rectify the governments estimated tax losses of $800 million/year.

The change has to pass in parliament but is likely to do that with the bloc & ndp also supporting but there are a lot of wrinkles to be worked out. This tax change does not take actually place until 2011 however the news dropped valuations on current trusts and prevents new ones like BCE & Telus (being considered) from converting without tax implications.

Many experts now are saying hang tight. If you're diversified it's only a part of your portfolio. The flip side is you've likely had the benefit of a top performing category in trusts for a while so you're just giving back those gains.

If you have an advisor give him a call and ask for an opinion.You'll probably get some good information by reading your business section watching & reading ROB over the next while.

 

^ Yeah, it's only a small slice of my portfolio, and I've only had it for about 14 months. Besides, it's only money, right?

 

Yeah it's only money.

Unfortunately I've got more than just a small amount in trusts.

 

Deane, because of the income trust news yesterday our Aliant stock took a nosedive today.....in which I have hefty chunk of.

I wonder how this will effect our company in the long run. As you are probably aware, Bell and Aliant merged back in July to become Bell Aliant....and became an income trust.

 

Shane, that's a shame. Funny I was looking at buying some BA a couple of weeks ago but decided on something else. Good thing I didn't load up with any more income trusts. Tomorrow morning I'l find out the $ damage.

BA.un took a 16% hit today. It's actually a security with a decent P/E ratio and pays a whopping 9.6% dividend yield so that's excellent. We'll see what the next number of days bring.

G/L

 

Mr Harper is not a popular guy in Calgary today!

 

^ not anywhere IMHO. He broke his word and it has cost many people dearly.

 

This is killing my stock option value.

 

Wait a minute, he's a polititian isn't he? If so, this is the norm, eh. But I agree, this is a big one, a very big one.
FWIW
My broker sent out an e mail to all of her clients and said Do nothing till the dust settles, then we'll talk.

 

Sorry to hear it. Just checked my account a few minutes ago. The story on my retirement savings isn't too good either.

Thankfully it wasn't as bad as it could have been. I had moved a lot into cash about two weeks ago and had shifted a lot into global markets during '06 expecting a bubble to burst.

 

Yep, politician for sure. If that was a business executive doing that publicly he or she would go to jail.

Good to see your broker is proactive. G/L

 

bah thats why im in the DOW and NAS... :P even my RSVP stuff holdings are made up of a mutual that holds several cdn mutual funds that sub hold US stock :P

so what are the exact details of this new legislation?

 

I'm not quite following what you're saying but if you feel invincible with your investments good for you.

There is no legislation yet. It's proposed to have income trusts taxed at source (like coporations) before distributions go to unit holders. That will guarantee trusts will have to lower yields. Purportedly this makes it a level playing field for corporations versus trusts.