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kathleenann writes (in part):

I have some mutual funds that are not performing as I hoped, and I would like to get out of them. They are not worth what I paid for them originally in Feb 99. What kind of taxable avent would this provoke? Maybe I should try to exchange them into another fund within Vanguard?

I reply:

Whether you redeem the funds for cash or exchange them into another Vanguard fund, you'll have the same taxable event. Since you have held the funds less than a year, you will have a short-term capital loss.

A little unsolicited advice regarding performance, though; how have your funds fared compared to the S&P 500 over the same time period? If they're doing poorly because the market is doing poorly, you might want to rethink the move. On the other hand, if they are trailing the market, many Fools suggest using the Index 500 fund until and unless you feel prepared to invest in individual stocks. One final suggestion -- I've been in Vanguard's PRIMECAP for several years, and that money is well ahead of the S&P 500. I believe it may be closed to new investors, though. --Bob
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