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From: suhre@trwrba.UUCP (Maurice E. Suhre)
Newsgroups: net.invest
Subject: Re: Mutual fund switching: Beware!
Message-ID: <1908@trwrba.UUCP>
Date: Mon, 10-Mar-86 12:45:58 EST
Article-I.D.: trwrba.1908
Posted: Mon Mar 10 12:45:58 1986
Date-Received: Wed, 12-Mar-86 22:03:08 EST
References: <2019@uwmacc.UUCP>
Reply-To: suhre@trwrba.UUCP (Maurice E. Suhre)
Distribution: net
Organization: TRW EDS, Redondo Beach, CA
Lines: 19

In article <2019@uwmacc.UUCP> jwp@uwmacc.UUCP (Jeffrey W Percival) writes:
>It's my understanding that the IRS considers each such switch
>a sale and a purchase, exposing you to capital gains taxation
>on each switch.  If true, this would seriously erode the
>advantage such switches would offer in getting your money in
>the right fund at the right time.  Comments?
>
Yes, it's true.  However, if you don't make any money you won't
have any tax liability.  The trick would be to estimate how much
your profits would erode if you waited for the capital gains holding
period to complete.  If I could do that, I'd be "famous by Friday".

The Wall Street Week Elves have called switch about once a year for
the last 4 or 5 years, and Mark Hulbert offered anecdotal evidence
that hyperactive switching isn't any better than moderate switching.

Maurice

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