You're absolutely right that we should keep the big picture in mind when we're dealing with capital gains.

ETFs—at least, traditional equity and fixed-income ETFs—remain extremely tax efficient.

I've been pulling together the data on capital gains distributions for equity and fixed-income ETFs in 2008. By my count (and my numbers are rough), 54 out of 684 relevant funds paid short- or long-term capital gains distributions this year. That's 7.9% of the ETFs, which is way up from last year's level of just 0.3% of all funds.

The culprit, as discussed, is the inverse and leveraged funds. They account for 42 of the 54 recorded distributions. And more importantly, they account for ALL of the major distributions: Among the other 12 ETFs that paid distributions, none paid out more than 1% of the fund's net asset value.

Holders of traditional equity and fixed-income ETFs can rest assured, then, that ETFs remain as tax efficient as ever. But holders of more-exotic funds must stand on guard.

Speaking of perspective ... I'm on vacation tomorrow, so this will be my last blog of the year. From a finance perspective, it's goodbye and good riddance. This year was manic and awful for investors, with huge speculative bubbles and huge bubbles burst. We're only beginning to feel the pain in the real-world economy, and that's certain to get worse in the first part of 2009.

As I've said before, however, I'm hopeful that we'll see a steady recovery in 2009, and believe that markets have already seen their worst levels. The monetary stimulus has been overwhelming, and generally speaking, pointed in the right direction. It'll take time to work through the system, but it should have an impact in the long run.

For now, best wishes for a healthy, happy and prosperous New Year. See you all in 2009.