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Long term investing is good tax wise
It is not just the fact that beating the market in the long term by flipping stocks is close to impossible, but being a long term investor also makes sense tax-wise.

Taxes and mutual funds that flip stocks
Quote: “If your fund distributes capital gains, you’ll get a 1099 even if you didn’t sell any shares or if your investment lost money. That’s because they’re generated by the actions of the fund manager, not the individual investor. When a portfolio manager sells securities at a profit during the year, it creates a gain which the fund is required to distribute to shareholders annually.”

It is suggested that saving tax by not realizing any gain and holding for many years - boost your total return anywhere from 0.5 percent to 1.5 percent a year, depending on your portfolio.

Quote: “For someone young, just coming out of college, this can mean the difference between retiring at 65 or 60 versus maybe retiring at 75. So for the smaller investor, it’s absolutely critical.”

Some things to consider

1. Tax-deferred account such as an IRA or a 401(k) could save money.
2. Look for mutual funds with lower turnover (longer holding periods).
3. Consider dropping a mutual fund and have a do it yourself portfolio of stocks.