Selling winners also generate taxes. I suggest you stop reinvesting the dividends and capital gains and to the extent you don't need the money reinvest in index funds,. With your FIDO funds putting money into Spartan Total market should work fairly well.

"John, you're not putting new money into the fund with a reinvestment of a cg distribution. You have exactly the same investment you had before, except that you've picked up early tax liability for some of the fund's gains. "
Agree, but I am talking about after the fact. Money wise, it's a wash but you end up with more shares. As time goes on those added shares help to grow the investment. Granted, you need to hold the fund or investment for a period of time.
A mythical example; Say If you bought 100 shares of a fund and never bought another share, and that fund declares distributions regularly. After 10-15 or so years you end up with 120 shares. While you did not make money on those distributions, those extra 20 shares are working for you, hopefully in your favor.

http://www.sec.gov/Archives/edgar/data/1215881/000141304214000349/birmiwalcls497.htm
497 1 birmiwalcls497.htm
Birmiwal Oasis Fund
(BIRMX)
Supplement dated December 30, 2014 to the Prospectus dated August 1, 2014
____________________________________________________________________________
The Board of Trustees of the Birmiwal Investment Trust, on behalf of the sole series of the Trust, the Birmiwal Oasis Fund (the "Fund"), has concluded that due to the relatively small size of the Fund, it is in the best interests of the Fund and its shareholders that the Fund cease operations. The Board has determined to close the Fund and redeem all remaining outstanding shares on January 30, 2015.
Effective December 30, 2014, the Fund will no longer pursue its stated investment objective. The Fund will begin liquidating its portfolio and will invest in cash equivalents such as money market funds until all shares have been redeemed. Any required distributions of income and capital gains will be distributed as soon as practicable to shareholders and reinvested in additional shares, unless you have previously requested payment in cash. Shares of the Fund are otherwise not available for purchase.
Prior to January 30, 2015, you may redeem your shares, including any reinvested distributions, in accordance with the "Instructions For Selling Fund Shares" section in the Prospectus. Unless your investment in the Fund is through a tax-deferred retirement account, any redemption is subject to tax on any taxable gains. Please refer to the "Taxes" section in the Prospectus for general information. You may wish to consult your tax advisor about your particular situation.
ANY SHAREHOLDERS WHO HAVE NOT REDEEMED THEIR SHARES OF THE FUND PRIOR TO JANUARY 30, 2015, WILL HAVE THEIR SHARES AUTOMATICALLY REDEEMED AS OF THAT DATE, AND PROCEEDS WILL BE SENT TO THE ADDRESS OF RECORD. If you have questions or need assistance, please contact your financial advisor directly or the Fund toll-free at 1-800-417-5525 or the Fund’s adviser, Birmiwal Asset Management, Inc., at 1-206-542-7652.
IMPORTANT INFORMATION FOR RETIREMENT PLAN INVESTORS
If you are a retirement plan investor, you should consult your tax advisor regarding the consequences of any redemption of Fund shares. If you receive a distribution from an Individual Retirement Account or a Simplified Employee Pension (SEP) IRA, you must roll the proceeds into another Individual Retirement Account within sixty (60) days of the date of the distribution in order to avoid having to include the distribution in your taxable income for the year. If you receive a distribution from a 403(b)(7) Custodian Account (Tax-Sheltered account) or a Keogh Account, you must roll the distribution into a similar type of retirement plan within sixty (60) days in order to avoid disqualification of your plan and the severe tax consequences that it can bring. If you are the trustee of a Qualified Retirement Plan, you may reinvest the money in any way permitted by the plan and trust agreement.
This Supplement, and the existing Prospectus dated August 1, 2014, provide relevant information for all shareholders and should be retained for future reference. Both the Prospectus and the Statement of Additional Information dated August 1, 2014, have been filed with the Securities and Exchange Commission, and are incorporated by reference, and can be obtained without charge by calling the Fund toll-free at 1-800-417-5525.

Keep in mind that this year is a bit unusual in terms of distributions.
2013 was a fantastic year. If funds were still sitting on realized but undistributed losses going back to 2008, they all but surely used them up that year. (Funds are required to distribute substantially all of their net gains each year, but if they have losses, they can't distribute them. Instead, they are allowed to use them against gains in future years - I believe for up to ten years.)
Follow that with an above average 2014 (domestically, anyway), and you've got the makings of disproportionately large distributions. It pays to keep things in perspective. For example, FMIJX (FMI Int'l) is in the 2nd percentile for 3 year after tax returns (excluding this year). And this is a very concentrated fund (29 stocks, plus some other securities) - do you want to replace it with a fund that has a gazillion holdings?
Don't overreact to one year's taxes and lose sight of the objective - net return, not minimizing taxes. The latter is easy - don't make money.
If you sell your shares, you'll wind up paying more taxes now (gains on the shares). If you want to make some moves, you might consider taking the distributions in cash, and investing them in newly selected funds.
I would be more inclined to use Vanguard than Fidelity for broad based stock index funds. They tend to have lower cap gains distributions (e.g. Spartan 500 made cap gains distributions this year and in 2007), Spartan Total Market made cap gains distributions in 2007-2010). You don't see these in the Vanguard funds. (Also, the Vanguard funds have ETF shares, so they have the tax advantages of an ETF, with no bid/ask spread.)

Based on the capital gains distributed on several of my funds held in taxable accounts, I would like to make my taxable portfolio more tax efficient. I have a fairly high value account overall, with approx. half a million dollars in taxable accounts. They include large stakes in Vanguard Wellington, Berwyn Income, Fidelity Contrafund, Fidelity Low Priced Stock, Artisan Global Value, Scout Mid Cap, Yacktman Focused and FMI International. Some of these funds had very hefty capital gains distributions which will cause some heartburn during tax season. Do you have any suggestions on how best to substitute some of these holdings with more tax efficient ETFs or Index Funds? I'm not too concerned with slightly lower performance if the fund is more tax efficient. Thanks.

John, you're not putting new money into the fund with a reinvestment of a cg distribution. You have exactly the same investment you had before, except that you've picked up early tax liability for some of the fund's gains.
Compounding as I've always understood it is putting new money, a little at a time, into an investment. That isn't the case with cg distributions. It is the case with, for example, daily accrual bond funds; each month you're getting an income dividend - new money - that you can use to buy more shares if you choose.

Puddinhead:
If you are interested in mid-cap investing, simplify your life and your portfolio returns by buying VO - the Vanguard midcap ETF fund. It will outperform 95-98% of mutual fund mid-caps and eliminate MF expense ratios, market cap creep, paying yearly taxes on ST and LT capital gains from MF portfolio turnover, etc. The best part?? The longer you hold onto VO the greater its degree of outperformance because of the above-mentioned factors that siphon off a portion of your profits from positive (if applicable that given year) MF returns.

Some funds offer guesses with their year end estimates (e.g. T. Rowe Price), but they are few and far between. And not too accurate.
I generally look at the dividends, see what portion were short term gains (if they were broken out), and treat them as nonqualified. Beyond that, I just look at last year's percentage of qualified to total dividends, and use that as a first order approximation.
Another part of the problem is foreign taxes (foreign tax credit). That's added to your dividends (reported in box 1a), but you never see the cash. Harbor Funds provided an estimate, but they're a rare exception, and for the most part this really winds up being a wild guess.

Call me stupid - I don't get it - What is bad about getting a Long Term Capital Gains Distribution LTCGD or for that matter a short term one?
I see evaluating a funds performance against the benchmark - that is a separate issue.
I understand the tax issues.
I understand the offsetting mentioned in the article.
But what is wrong with getting $ (unless the fund you bought goal was to minimize LT & ST distributions).

Hi Amir,
Now, that you have picked our collective brains for certain information ... How about telling us what actually went down with this presented sell transaction?
Old_Skeet

As usual, the collective wisdom here was outstanding. Thanks.
Fairholme Capital Management in Miami says the "owner of record" is determined at the close of business (rather than the open). So, a sell transaction (even) on the record date puts you out of the fund in advance of the ex-dividend date, avoiding the hefty distribution.

That's Paul's V. selections...not the best but probably passable for non Vanguard investors to mull over
I would have a different selection (after 30+years of excellent gains with vanguard) My wife(who could caresless) picks her favorites and makes her 8% every year (Avg)
So maybe he is an "expert"....but....

Hi folks,
Thanks to all that have made comment.
Here is what I have decided to do in management of my special equity investment spiff assuming the market continues its upward advancement.
Now that the S&P 500 Index is in striking distance of 2,100 I have decided to reduce my equity allocation by one percent for every twenty five point gain on the Index above the 2,100 mark. In doing this, the dollar value will remain about the same within equities but my cash position will grow as the Index advances and I move through the process.
Should there be a 125 point gain in the Index during the first quarter of 2015 with it reaching a value of about 2,225 then I’ll take a five percent reduction at the fifth 25 point step. In doing this I will have removed sums of approximate value for the spiff itself plus removed some capital appreciation form the equity side of the portfolio while at the same time increased my cash allocation by a like amounts through the process. Thus, I’ll be reducing my overall portfolio risk as equities have advanced; and, by my thinking continue to becoming well overbought. At this point I will revisit and revaluate my posture.
If the plan is successful then this special spiff will have produced better than a 13% return since mid October through an averaging in and out process.
Wishing all … “Good Investing”
Old_Skeet
Note: All of this is subject to change should the market move against me beyond a mild dip.

Long term capital gain is determined by how long it has been owned.

A colleague at work asked for guidance on selling a long-held mutual fund on the Record (12.26) Date but before the Ex-Dividend Date (12.29). I was not able to advise.
If they proceed with selling on the Record Date, will they get stuck with a higher tax bill, and the hefty distribution, once it goes Ex-Dividend, or will their profit benefit from a lower taxed long-term capital gain?

It will sit in my wife's, safe deposit box (as jewelry), collecting no interest, dividends or capital gains but lots of dust...Oh Well... peace and harmony to ME comes with a price

@Mark
Agree.
We have held healthcare long enough to absorb a pull back; if it arrives. As is generally the case, of when (how long has the investment been held and its gains) one buys an investment; being that someone who bought just yesterday would not be so happy at this moment today.
This type of news may not be of true consequence for anything more than a trading event for the traders.
Stay warm.
Catch

FYI: Charles Schwab (NYSE: SCHW), the discount brokerage giant and eighth-largest U.S. issuer of exchange traded funds, said Monday none of its 21 ETFs will distribute capital gains this year marking the fifth consecutive year none of the firm’s ETFs have hit investors with capital gains distributions.
Regards,
Ted
http://www.etftrends.com/2014/12/schwab-etfs-say-no-to-capital-gains/

Ol Skeet. I value your posts. You are a voice of reason.
My point to Dex was that very few here let their investments run year after year without modification. (I certainly don't.)
I think all of our discussions here about "raising cash", buying a fund or sector, "selling in May", "locking-in" gains, "stopping out" of a position, "overweighting" this or that area, and "taking a (tax) loss" have some element of market timing to them.
The term has, unfortunately, acquired some negative connotations - mostly undeserved. Some of these arose due to Elliot Spitzer's and other investigations into fund improprieties around 1999. Fund families, too, like to preach the gospel of buy and hold (but one could surmise, they have a vested interest in keeping us put).
So ... No criticism intended from this corner. Others can speak for themselves.

FYI: The exchange-traded fund (ETF) industry saw one of its largest monthly gains in November, with data compiled by ETF.com showing that U.S.-listed ETFs witnessed $42 billion in net inflows for the month. [1] The strong performance for the extremely popular investment channel helped asset managers rake in more than $192 billion in net new money across their ETF offerings for the eleven-month period this year – comfortably surpassing the $188 billion record figure for full-year 2013. U.S.-listed ETFs are just shy of $2 trillion in total assets – a threshold they are very likely to cross by the end of the year thanks to the record run for the equity market over recent weeks.
,BlackRock (NYSE:BLK) gained the most over the year, with the financial institution capitalizing on its position as the world’s largest asset manager as well as world’s largest ETF provider to report net inflows of $71.4 billion in the U.S. and almost $90 billion worldwide. [2] Vanguard, which saw an exceptionally strong start to the year (see Vanguard Trumps BlackRock, State Street To Record Highest ETF Inflows In Q1), comes in a close second with $63.5 billion in U.S. inflows and $75 billion in global inflows. This has brought Vanguard within striking distance of State Street (NYSE:STT) for the position of the second largest U.S.-listed ETF provider.
Regards,
Ted
http://www.trefis.com/stock/blk/articles/271067/blackrock-continues-to-make-the-most-of-the-etf-growth-story/2014-12-19