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Originally Posted by kv968
they try to discourage people from trying to time the market.
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Just as a further explanation of this, in case you are interested...
There is a big difference between trying to time the market by buying individual stocks and mutual funds. With individual stocks, you buy them, another shareholder sells them. The transaction doesn't really affect anyone else who owns that stock.
With a mutual fund, however, share redemptions potentially impact everyone. If the fund manager has to sell stocks held in the fund to raise cash to pay the customer, that can generate trading costs and taxable gains that get passed on to everyone who owns shares of the fund. So a lot of short-term redemptions can drag down the overall performance of the fund which his bad for everyone involved.