Company: CLM
Filing Date: 2025-04-08
Form Type: N-2/A
Source: 0001398344-25-006812
Chunk: 56

Company: Cornerstone Strategic Investment Fund, Inc.
Filing Date: 2025-04-08
Form: N-2/A
Chunk 56
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 corresponding increases in brokerage commissions and may generate short-term capital gains taxable as ordinary income.

Preferred Securities Risk.Investment in preferred securities carries risks including credit risk, deferral risk, redemption risk, limited voting rights, risk of subordination and lack of liquidity. Fully taxable or hybrid preferred securities typically contain provisions that allow an issuer, at its discretion, to defer distributions for up to 20 consecutive quarters. Traditional preferreds also contain provisions that allow an issuer, under certain conditions to skip (in the case of “noncumulative preferreds”) or defer (in the case of “cumulative preferreds”), dividend payments. If the Fund owns a preferred security that is deferring its distributions, the Fund may be required to report income for tax purposes while it is not receiving any distributions. Preferred securities typically contain provisions that allow for redemption in the event of tax or security law changes in addition to call features at the option of the issuer. In the event of a redemption, the Fund may not be able to reinvest the proceeds at comparable rates of return. Preferred securities typically do not provide any voting rights, except in cases when dividends are in arrears beyond a certain time period, which varies by issue. Preferred securities are subordinated to bonds and other debt instruments in a company’s capital structure in terms of priority to corporate income and liquidation payments, and therefore will be subject to greater credit risk than those debt instruments. Preferred securities may be substantially less liquid than many other securities, such as U.S. government securities, corporate debt or common stocks. Dividends paid on preferred securities will generally not qualify for the reduced federal income tax rates applicable to qualified dividends under the Code. See “Certain Additional Material United States Federal Income Tax Considerations.”

Real Estate Investment Trust (“REIT”) Risk. Investments in REITs will subject the Fund to various risks. The first, real estate industry risk, is the risk that REIT
share prices will decline because of adverse developments affecting the real estate industry and real property values. In general, real
estate values can be affected by a variety of factors, including supply and demand for properties, the economic health of the country
or of different regions, and the strength of specific industries that rent properties. REITs often invest in highly leveraged properties.
The second risk is the risk that returns from REITs, which typically are small or medium capitalization stocks, will trail returns from
the overall stock market. The third, interest rate risk, is the risk that changes in interest rates may hurt