Distributions are no reason to panic, ... What you're doing if you sell is realizing all of your gains. You're selling your fund and you're creating a taxable event.

You've accelerated your liability,

You have to take each situation individually, ... Don't make a knee-jerk reaction.

Say we have to sell shares of Cisco to match its standing in a particular index. We sell the shares we have with the highest cost basis.

The average mutual fund has lost about 2.5 percent a year to taxes on dividends and capital gains. Most funds are managed without regard to taxes, but taxes are something that can be controlled.

You have some flexibility,