From: David M Lusher [dmlusher@raytheon.com]
Sent: Monday, May 10, 2004 3:56 PM
To: rule-comments@sec.gov
Subject: S7-11-04: 

As an informed individual investor, I would like to comment on the section
of the proposed rule dealing with the 5 day holding period. I feel that the
rule should definitely set a maximum period beyond which the mandatory
redemption fee may not be imposed. I manage my own 401K rollover account,
and I occasionally find it desirable to drop a poorly performing fund and
move to a better performer. This exchange may take place after having been
in a particular fund for as little as 2-3 months, and has nothing to do
with market timing. Simply put, given the amount of information available
to the individual investor today, there is no reason to stay with a poorly
performing fund once it has established itself as such. My concern is that
unless a maximum time period for imposing the short term fee is
established, fund companies will extend the fee period for as long as they
desire. Essentially, they will be simply charging an additional fee, using
supression of market timing as a convenient excuse. Trading between funds
the 3-4 times a year that I do, these additional transaction fees can add
up to a substantial tax on my retirement account. My choices would then be
to stay with a badly performing fund (thereby mitigating the incentive for
the fund to improve its' performance), or end up with less money
(increasing my dependance on an already overextended Social Security
system). For this reason, i strongly urge the SEC to establish an upper
time limit for imposition of the STR fee.

Sincerely,
David Lusher