My apologies on the tax issue. I didn't realize that MSTY distrbutions were mainly ROC. Around 95% is ROC which lowers your ACB so that you will eventually be taxed at the cap gains rate. Even dripping you will eventually end up with zero ACB and will have to pay tax on all future ROC but at capital gains rate. So until you reach zero ACB the distributions are almost tax free. My bad for making assumptions.. I was going by my BITO shares that doesn't return capital.
Where are you getting 95% from? LOL. You can look at each month's payout on their website to see what portion if any is ROC. Also, BITO returns capital too if you look at the prospectus.
why not? Borrowing because you can’t pay cash and borrowing for capital structure management are two different things.
Poor use of capital. True they are different but why borrow to buy a depreciating asset. If you have to borrow to buy it you probably don't need it right now. In our consumer society most people are buying things they don't need, with money they don't have, to impress people they don't like.
If you don't want to buy the asset then it doesn't matter. The assumption is you are going to buy the asset anyway. I agree you shouldn't buy an asset you NEED to finance, but if you can and you can earn more in the market, it's worth doing it. A lot of wealth can be created using leverage properly. Personally i think it was worth an entire turn on my net worth (levering at the right times, and delevering at the right times).