Pardon me if this is a dumb question...

Are Capital gain distributions good things? Obviously, the fund is giving you money, but at the same time a large capital gain distribution can cause your cost basis in the fund to drop dramatically. EX: if you bought the fund at $10, and you get a $1 cap. gain distribution, the fund NAV will drop to $9 and your cost basis turns negative, even though you have more money invested in the fund that you intially put in.

 Can someone help me to understand this?