Best Index Investment Strategy?

[KellyRae]

Thanks for this information. Is it correct that as long as you keep the money in the funds you have invested in you will not incur any taxes until you sell the interest in the funds? Or do you receive annual payments for dividends or the like on these funds (I am guessing they just stay in the fund, so no taxes are incurred but not sure).

Also with respect to the bond funds - if holding in the fund avoids taxes until you liquidate (unless, again, there are payouts in the form of dividends or interest), would a long term investor ever really be better off in tax-exempts as is suggested later in this thread?

Thanks in advance for any thoughts on this.