Dear Shareholder:
Dividend Reinvestment: I have a suspicion that many of our shareholders do not understand that they can reinvest their dividends, much less what happens if they choose to do this. The first thing that happens is that an account that reinvests its dividends earns more (through compounding) than an account that does not reinvest. The difference is large enough to make you pay attention. For example, a 4.00% yield on shares that payout the dividend becomes a 4.07% yield if the dividend is reinvested. That amounts to some significant extra money over a period of time.
The second thing that seems not to be understood is that you can change your choice of dividend reinvestment/payout with a simple telephone call. It’s one of the few things left that doesn’t require a letter. And since your dividend is tax-free, it all goes to work for you, compounding your return without accruing additional taxes.
I have opted to reinvest my dividends for years. If I need money, a simple telephone call to redeem shares suffices to get me that cash in as little as one day. (Actually, I don’t have to telephone; I work here.) Your account will automatically be set up with telephone redemption privileges unless you instruct us otherwise.
Finally, those of you with relatively small accounts almost can’t afford to not reinvest your dividend. You may accidentally misplace the small check for your dividend when it comes and have to call us for a replacement. When you get the check you have the trouble of depositing it and accounting for it. All of that disappears when you reinvest your dividend automatically. So it really does make sense to reinvest your dividends.
You can change your selection of dividend payout as often as you want and without charge.
Direct pay to your bank account: We can arrange to have your dividends or redemptions transferred to your bank electronically through the Automated Clearing House (ACH) Network if you direct us to do this. It takes two days for the money to hit your bank account; occasionally three depending upon when your bank posts cash receipts. The service is free and is very convenient. I know; I have used it for years.
The way you do this is to write us, instructing us to deposit checks to your bank account, enclosing a voided check (be sure it’s voided). A sample letter might say: “Dear Sirs: Please deposit all cash withdrawals from my Dupree Mutual Funds Account # ------------- to the bank account designated on the enclosed voided check. Signature, Date”.
These are just a couple of ideas that might make your life simpler.
Speaking of making things simple: From time to time my wife, Clara, has trouble getting her bank account to balance. Sometimes it gets in a hopeless mess and both of us are unable to guess whether it is even close to right.
On one such occasion, after a few sharp words and penitent apologies for those sharp words (from me), Clara took matters in her own hands (and out of mine).
She sashayed down to our friendly neighborhood bank and opened a new account. Then she ceased all transactions in the old account until all checks had cleared and the balance had remained the same for at least two months. When this test was met she then declared the old bank account “healed”, accepted its balance and began using that account again. By that time the new account needed healing.
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Correction: In early September you received our “June 30, 2006 Annual Report to Shareholders”. Page 38 contained “Financial Highlights” for the Intermediate Government Bond Series. The last line of those highlights, listing expenses waived and interest rate reductions, was mistakenly omitted. A corrected version of this information appears on page 32 of the enclosed Prospectus. |
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