QUOTE:

This deferral of taxes is a very good planning technique to deal with the aging population. You tax the income when you need the tax revenue.

“The point investors should take away here is not that trusts have zero effect on federal government tax revenues, but rather that the problem may not be as severe as it’s sometimes billed.”

And furthermore, on the trust market at the time of policy uncertainty in 2006:

My REITs have done really well...The market for large-cap REITs has been hotter than a pistol.

“...energy trusts have been hurt by slumping oil and gas prices, while business trusts have been troubled by concern about an economic slowdown. Several business trusts have already had to cut or reduce their cash payouts and there’s concern that slower economic growth would cause more of these trusts to disappoint investors.”

Investors have taken down good, bad and indifferent business trusts, irrespective of the quality...We are seeing some opportunities developing on trusts where people are ignoring what aren’t bad businesses.

The safest thing to do if you’re worried about your income trusts would be to sell them now and try to find something else that offers the same high yields and potential for capital gains. Good luck to you on that.

FROM: Article by Rob Carrick
ROB in the Globe & Mail