Switch mutual funds and lose compounding?

It is not only the tax. Would we not also lose the compounding benefit if we exit and reinvest in a better fund? - Upender Vaid

Ashutosh Gupta: Yes, absolutely. That is the whole point, and it is what you should be mindful of. Tax should slow you down. It should not trap you. That is how we think about it.

Dhirendra Kumar: And your money starts working from there on. Make sure you do not redeem the money and then spend it. Do not consume it. If it is a long-term allocation, you are only moving your money from one place to another to compound better. That is why you should change the fund when it falls into the exit category.

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