The first pitfalls in mutual fund investing

The old gentleman, a retired military officer who's a former neighbour, has been asking me pretty much the same question for decades, "Suggest some good dividend-generating equity funds." All these years, I've been patiently (more or less) explaining to him that fund dividends are not really dividends, etc., etc., but it hasn't made a difference. It took me a long time to understand that while I was trying to fill this vessel, a liberal supply of fund dividends was drilling holes in it. Eventually, I gave up explaining this to him. He would receive dividends and reinvest them, doing no real harm to his investments. This was fine till this year's budget when the new tax rules made dividends actively lethal for your equity mutual fund investments.