Conference nyoss1::market_investing

I sold all 516 shares of my stock selector mutual fund.  this is a fidelity
growth fund.  i bought into the fund at 15.50 or so, and again at 17.00 or so.
i sold the lot for 18.35 (or so) last week for some profits.

this fund has no load and no penalties for short-term plays.

i have the money parked in the cash reserves fund right now and i will
xfr it back to the stock selector when things appear to be heading up.

i also own low-priced stock fund.  i'm holding this one through this mess.
3% load.

i also sold my scudder G&I fund for a small (very) profit.  this fund wasn't
doing much anyways and i was wonder why i was in a G&I fund too.  so, i have
this money parked in a stable income fund while things go wild.  i'll probably
move this money into my waterhouse account and buy individual stocks, maybe.

re Market correction in general....

In note 598.19 back last November, I suggested that if you needed cash within 
the next month, get your strategies lined up since we were in for a correction 
in the short term.  It happened and I make no claims of prescience; re-read my 
note 559.23.

For those of you who followed my advice and shuffled monies out as this slide 
got going, for those who kept invested because they were able to look beyond 
the short term, and even for those buy-and-holders who correctly presumed I did 
not know what I was talking about, I offer a strategy to answer the "What do we
do NOW, that the proverbial fan is splattering feces?" question.

Although rule #3 is "Buy Low, Sell High", now is the time to consider selling 
low.  Assuming you intend to stay fully invested in something, if you sell out 
a fund today and then put that money in a different fund (to avoid wash rules, 
another fund family will help your case in an audit) your investment position 
remains the same, but you have a loss sale to report on your next tax form.

Remember to follow rules #1 & 2; invest in well managed vehicles and diversify.

As always, For What It's Worth.....

Dave 

    what's the problem...I'm up for the year, and up well about 25% since 
    November....I think I'll hold.
    
    /mtb

re                        <<< Note 711.2 by REDZIN::COX >>>
                              -< A time to buy? >-

>(to avoid wash rules, 
>another fund family will help your case in an audit) your investment position 


do the wash rules apply to mutual funds???
i just sold one fund and would like to get back in it.  must i wait 
30 days to avoid the wash rule?

    
    .3  up about 25% since November
    
    	Congrats!  If you look at this week's Barron's, I think you'll
    	find that this puts you in about the top 1%.  In fact, anybody
    	with a gain of any kind is in the top few percent (as of 1-Jan).
    
    	/jim
    

    re: .4
    
    Yes, the wash rules apply to mutual funds.
    
    Don't let that keep you from reinvesting in a fund, however.  The wash
    rules just prevent you from artificially declaring a loss on a security
    you didn't really sell for long.  

re            <<< Note 711.6 by KOALA::BOUCHARD "The enemy is wise" >>>
                     -< Wash rules apply to mutual funds >-

>    Don't let that keep you from reinvesting in a fund, however.  The wash
>    rules just prevent you from artificially declaring a loss on a security
>    you didn't really sell for long.  

This wash rule is always hard for me to parse!  I bought into the Stock Selector
fund at 15.50 or so and sold it a few weeks ago for 18.80 or so.  so, i have
a gain here.  i want to reinvest in this fund eventually - do i need to wait
30 days before doing so?  or does the wash rule not apply since I have a 
gain?

    
    RE: .7
    Wash rules only apply to losses.   The IRS loves it if you do this,
    since they get their money this year instead of future years :-)
    
    RE: .6
    You can still report your loss and get back into another mutual fund
    with the same objective and track record (just don't get back into the
    identical mutual fund).
    
    
              -- Phil

    
    Agreed, the "wash rule" only comes into play to prevent you from
    declaring losses on securities you immediately buy back.
    
    But I don't think one should ever let the wash rule prevent you from
    reinvesting in something.  If you sell X as a loss, and decide a couple
    weeks later than buying X is a good idea, go ahead and do it.  The
    wash rules won't really hurt you; you won't be able to declare the
    loss during the current tax year, but that's no different than if you
    simply held the security.  

from the latest \Elliott Wave Theorist/, Gainesville GA 30503, +1.404.536.0309,
reprinted by permission:

"...In another new book, \Stocks for the Long Run/, a Wharton professor
linearly extrapolates past stock performance indefinitely into the
future and proclaims that stocks are the #1 choice for investment and
are \less risky/ than bonds and even \Treasury bills/ because of their
historical returns. Echoes one analyst, "The greatest risk for most
investors is that \they don't have enough of their capital in stocks/,
not that they have too much." In a linear extrapolation of \that/
argument, the June 24 \Wall Street Journal/ ran a large article on the
idea of "venturing into high-risk funds"...makes your mutual fund
portfolio \more tranquil/ and \lowers the risk/ by diversification.
(See how rationalization works to satisfy a psychological imperative?
High risk now \means/ low risk.) A mid-June survey of "29 of the
country's smartest, most influential money managers" showed that
\ninety percent/ of them expect Dow 4000 by year-end. \Ninety-five
percent/ of them expect a higher market over the next three years.
\Not a single one/ expects the long bond to yield more than 8% during
the rest of 1994. The professionals are so bullish that they
continually rationalize the public's behavior (since it coincides with
their own) as "intelligent". However, they will pay a tremendous price
for this historic rationalization. The public has, in its own eyes,
"courageously" (where was their courage in 1974?) stepped up to the
plate during the second quarter and bought more stock via mutual funds.
In April, they poured in $11.4b. and in May $11.8b., each one \double/
the March figure. ... These supposedly "better educated" public
investors are the same ones involved in a poll by the Securities and
Exchange commission indicating that among people who have bought mutual
funds through a \stock broker/ [JCH: Get that? Not a bank, a broker],
39% believe that their fund is federally insured against loss!
19% answered "I don't know". Only 42% knew that simple fact.