Red-Hot Resources

"Luck is not chance, it’s toil; fortune’s expensive smile is earned.”

Wednesday, November 01, 2006

Holy Crap! Income Trust Carnage!

Canada is throwing the entire income trust industry a gigantic curveball, implementing tax regulations that aim to curb the attractiveness of this entire market sector.

Doesn’t it figure that it would be a Tory government that ran on a campaign of low taxes that would do this? Damn! Just think of the tax implications for US investors.

The good news is we don’t have any income trusts in Red-Hot Canadian Small-Caps right now.

The bad news is a lot of our friends who do are feeling the pain. While the tax rate change won't go into effect for existing trusts for a few years, investors aren't waiting around. They are getting out NOW. I’m seeing energy trusts down 9% … 10% …12% and more.
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