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URL:  http://boards.fool.com/activereinvestor-wrote-it-was-advised-not-to-buy-21695323.aspx

Subject:  Re: distributions and IRA Date:  12/3/2004  2:30 PM
Author:  rkmacdonald Number:  43401 of 88498

activeREinvestor wrote:
It was advised not to buy mutual funds in December due to the distributions and taxes. Is this a concern if they are purchased in an IRA account?

Is it likely that enough people are influenced by such advice so that the market is distorted when it comes to MF share values? Is there a noticeable dip in new investments into MF in Dec or a spike in Jan?

I am aware of the distribution and tax issues. Just curious if enough people adjust their buying habits or if the automatic purchases drowned out any timing.


This is one of the reasons given for what is called the 'January Effect'. There is some evidence that this effect is real, but I think most professionals will say that even if it is real, it is probably too small to take advantage of.

Russ
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