Posting this here - Short Term Redemption Fee scam

[geckosfeet]

A heads up about short term redemption fees on mutual fund holdings.

About three or four weeks ago I sold off some holdings in a mutual fund that I have with Fidelity. When I sold it they smacked me with a short term redemption fee.

I thought this was odd since I have had the shares for a while - certainly past the short term redemption period.

I thought about it for a few days and determined that what was happening was that dividends from the fund were being re-invested in the fund. And I must have held some of the reinvested shares for less than the short term redemption period. Therefore I was subject to the fee.

Bastards.

I called Fidelity today and told them that all dividends are to be put into my core account. That way I know when there are shares that will be subject to the short term redemption fee, and I can invest dividends as I want.

Anyone else run into this scam?

[GeorgeGist]

1. Capitalism is a scam.

Bastards!

[westerebus]

2. I don't use Fidelity.

But, I do use mutual funds, thanks for the heads up.

[geckosfeet]

3. I suspect that they all engage in this practice.

Just give them a call to confirm how your dividends are being distibuted.