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To: Kayaker who wrote (72905)	10/19/1998 10:22:00 AM
From: Kayaker	Respond to of 176387

Info re Tax Loss Selling ©_1998 The Hartford Courant Small-Stock Mutuals Losing Big By RUSS WILES This column ran in The Courant October 18, 1998 ...........However, things could get worse before they get better because of tax-loss selling. Most mutual funds operate on an Oct. 31 fiscal-year deadline for reporting their capital gains and losses. This means they have another couple of weeks to unload weak holdings if they want to lock in capital losses for 1998. Why not just hang on to losers in hopes of a rebound? Some fund managers will do so. But others may feel compelled to sell certain holdings to avoid paying out taxable capital-gains distributions to shareholders during a year when their funds' total returns will be sharply lower. In other words, many portfolio managers will need to lock in some capital losses to offset gains realized earlier in the year, when the market was buoyant. "Tax-loss selling will be much more severe this year," warned Chuck Royce, head of the Royce Funds family in New York. "Managers will do what they can to avoid paying out gains. " Individual investors can keep selling hard-hit stocks even longer -- to the last week of 1998 -- if they want to lock in their own tax-deductible losses. However, bargain hunters also tend to crawl out of their holes near the end of the year, attracted by the selling. They provide a source of support for beleaguered stocks. "This raises the potential for a bounce-back rally in December," said McCrickard.