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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Kip518 who wrote (41394)	2/25/2000 9:08:00 PM
From: HairBall	Respond to of 99985

Kip218: How have you been doing, long time no talk...<g> I think you have certainly hit on some thing that all investors need to think about, along with the earlier linked post about Market Makers standing aside during a major decline... Of course all of us that experienced 87 KNOW, Specialist can and will stand aside as well... Regards, LG

To: Kip518 who wrote (41394)	2/26/2000 1:18:00 AM
From: PerryA	Respond to of 99985

Speaking of index funds, one of the interesting factors is that index funds have been consistently and repeatedly touted as the most tax efficient way to invest; yet that is only true as long as they receive net inflows. Because the old index funds like the Vanguard index 500 have enormous unrealized gains, they will be extremely tax inefficient if they get heavy redemptions and are forced to liquidate positions dating back several years. (On the bright side, though, they will at least qualify for long-term capital gains rates.) I doubt many people realize the contingent tax liability associated with their purchase of an index fund at net asset value. PerryA