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Strategies & Market Trends : Gorilla and King Portfolio candidates - Moderated -- Ignore unavailable to you. Want to Upgrade?

To: Jay who wrote (115)	10/28/2003 1:06:17 PM
From: Mike Buckley	Read Replies (1) \| Respond to of 2955

Jay, What I do not completely understand is why they discourage investors/traders from legitimately trading these funds. How does it affect a funds performance with traders moving between funds in a short time frame? An abnormal amount of trading affects the fund manager's ability to implement the chosen longer-term strategies. As an example, if there are a lot of shareholder redemptions the manager might be forced to sell stock when his strategy dictates buying stock. When that happens the traders' interests are in conflict with those of the long-term investors and possibly with the strategies explained in the fund's prospectus. Also, a large amount of investor trading increases the management company's costs and reduces profits. We'll never see that concern publicized by a management company but it's an understandable fact. --Mike Buckley