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Tks Dan. I see what you mean. A partial
answer to this dilema is hedging. The 2% strf eliminates the profit edge
in systems which trade mutual funds on a short
term basis.
Best regards,
Chas
<BLOCKQUOTE
>
----- Original Message -----
<DIV
>From:
Dan
Goncharoff
To: <A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
Sent: Thursday, March 18, 2004 1:01
PM
Subject: Re: [RT] MUTUAL FUNDS: 2%
STRF
Your right -- your friend would forbid me from being able to
adjust my portfolio monthly, since he would restrict me to four buy/sell
transactions per year.Unlike your friend, I don't think a rule
concerning short term trading should have include anything that restricts long
term portfolio readjustments. It should only address short term trading, which
I think is properly defined as trading within five days of purchase. Either
you restrict it or you don't.I would point out to your friend that he
is not "forced to hold a position in the face of a plunging market". He can
sell it anytime -- he just has to pay 2% if he does so within five
days.RegardsDanGCharles Meyer wrote:
Dan-
Please; what are you saying you have to pay,
when, and how much?
chas
<BLOCKQUOTE
>
<DIV
>-----
Original Message -----
<DIV
>From:
Dan
Goncharoff
<DIV
>To:
<A title=realtraders@xxxxxxxxxxxxxxx
href="">realtraders@xxxxxxxxxxxxxxx
<DIV
>Sent:
Thursday, March 18, 2004 12:44 PM
<DIV
>Subject:
Re: [RT] MUTUAL FUNDS: 2% STRF
If I understand your friend correctly, he thinks a rule
intended to restrict short term trading in mutual funds should allow him
to sell his fund in five days, but I should pay a fee when I readjust my
fund portfolio on a monthly basis.I don't think you friend
understands the problem.RegardsDanGCharles Meyer
wrote:
A friend of mine posted this eloquent
statement to the SEC website.
Chas
====
<SPAN
>Your proposed
regulation of a 2 percent short term redemption fee for purchased mutual
funds held less than 5 days is a perfect way for you to punish
individual investors while enriching the crooked fund companies that
have allowed excessive trading for a few which is prohibited by their
prospectuses.
<SPAN
>
<SPAN
>While I rarely
sell newly purchased funds within 5 days, I do have a stop loss
discipline that causes me to exit a position if the market should go
strongly against my entry point. The fact that you would seek to
penalize me when this situation does occur adds to losses I will
sustain. The idea that I should somehow be forced to hold a
position in the face of a plunging market is truely offensive to
me. Dont you understand that it is important to manage risk in
ones portfolio?
<SPAN
>
<SPAN
>Some funds have
a rule that says investors are allowed only four buy/sell transactions
in a fund per year. I find a rule such as this entirely
reasonable. It addresses the problem of excessive trading while
neither punishing the individual investor for selling when markets
decline nor enriching the fund companies at the expense of the
investor. Please consider a more neutral rule such as this.
<SPAN
>
<SPAN
><FONT
face=Arial color=navy size=2><SPAN
>
<DIV
>
<SPAN
>
<SPAN
>Hi-
<SPAN
>
<SPAN
>I read this morning on my
DTN screen that the SEC is taking public comments on this proposal
through May 10: 2% short
<SPAN
>term redemption fee on any
mutual fund held < five days. (<A
href="">www.sec.gov)
<SPAN
>
<SPAN
>It would appear that
investors might have until June maybe before they will know what's
going to happen on this issue.
<SPAN
>
<SPAN
>Chas
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