Conference nyoss1::market_investing

    Technically, no.  
    
    The share FMV is determined at the close of each day by dividing the
    total networth of the fund by the number of shares.  Since distribution
    is from the total networth, the networth goes down.  If you have
    automatic re-investment of distributions, the number of shares you own
    increases for a net-sum-zero effect.
    
    However, timing IS important.
    
    There are some dynamics involved that have little to do with simple
    math.  Ususally, the post-distribution networth of the fund actually
    decreases since many people do not have automatic re-investment; that
    makes sense.  Soon after, the networth of the fund increases back to
    where it was or even higher.  All I can figure is that either those
    folks who do not have automatic re-investment decide to send their
    money back in; or fund members notice the distribution and feel so good
    about it (like eating ice cream) they send in more cash; or non-members
    see the distribution and figure it is a good fund and send in cash; or
    whatever.
    
    The worst thing you can do is BUY into a fund just before distribution
    when the distribution is near the end of the year.  You would be
    getting Capital Gains Distributions (taxable) immediately; you would be
    taxed on money that you did not have for long.
    
    And, yes, you OFTEN can make money by redeeming shares the day before
    distribution and buying them back the day after; but you are gambling
    on unpredictable market dynamics.  Of course, selling for a loss and
    re-buying in hopes of tax advantages runs afoul of the "wash rule".
    
    Dave
    

Re: .1
    
>    However, timing IS important.

Agreed. Not only important, TIMEING is everything.  
   
>    makes sense.  Soon after, the networth of the fund increases back to
>    where it was or even higher.  All I can figure is that either those

Especially in the upper market. I also observe for GROWTH STOCK fund or
Max Growth fund, this is most the case.
    
>    The worst thing you can do is BUY into a fund just before distribution
>    when the distribution is near the end of the year.  You would be
>    getting Capital Gains Distributions (taxable) immediately; you would be
>    taxed on money that you did not have for long.

Agreed. I only do Xact from Jan-Nov, and celebrate Christmas during end of 
year to give yourself some award for 11 monthes of market chasing work. :-)
   
>    And, yes, you OFTEN can make money by redeeming shares the day before
>    distribution and buying them back the day after; but you are gambling
>    on unpredictable market dynamics.  

Combined this with Value Averaging investing rules, you will gain handsomely.
All you need is to set up MMK fund and one of your red-hot Growth fund and
do exchange based on your crystal ball.

Michael..  
    

    Timing _is_ important.  Those who deferred their purchase of mutual
    fund shares until January 1992 instead of buying them in December 1991
    missed out on a hell of a lot of capital appreciation.

    re: .3
    
    While I agree with what you said about missing out the appreciation.
    The "sad" part is that in the earlier half of the year, most of the
    stock funds have depreciated their share values. Whatever they've
    gained in December and January, they most likely losted it all back.
    
    Mike