I have a very small mutual fund, but have lost 20% just over the past few months. Would it be wise in these economic times to put a little more in for the impending improvement (eventual improvement, that is), wait it out, or pull out? On CNN the other night an economist suggested putting a little more into and buying some investments while they are cheap, and we will eventually have an upturn. But I am hesitant!
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I lost a lot. I’m not selling but I am putting some money into federally secured savings accounts at my credit union.
Let’s put it this way–my mutual fund has been dropping in value since Sept of 2007 every month. It is now at such a low point that it has been this low per share in 5 years!
I’d not pull anything out now but it does concern me that we are on the edge of something really bad for quite awhile and you should have some money put away that is safe you can get to in a pinch.
If you don’t need the money for another few years, you should leave it alone. All of the market overall is down that much. The reason why they say to put more money into the market is because there is no way to know when the market will start going back up and if you wait, you will end up missing the majority of the increase.
When it comes to the stock market, what goes down eventually comes back up. Don’t panic, you’ll be fine. In fact, putting more in while prices are low is a good idea.
Remember: Buy low, sell high. Not the other way around.
You don’t say what kind of fund it is or who runs it, but the first thing you should never do is get advice from guests on CNN. They have been caught more than once letting people hawk stocks without divulging the fact that they own it.
Secondly, there are only a handful (literally) of Mutual Funds that are up on the year right now. Even the Vangard Index 500 fund is down almost 15% so you are not far behind the curve.
Thirdly, Mutual funds by their nature are vehicles for mediocrity, as they rely on baskets of stocks that mitigate their potential. So, unless you are looking to take control of your investments on your own, your best bet at this point is to probably let it ride.
At this point it’s best to buy several blue chip individual stocks. Mutual funds are loaded with too many stocks that will never recover, bringing down value of those that do in a Portfolio. They are too large a spread and will take too long for recovery…that is if the fund managing firm still exist.
I like when people say “when it comes to the stock market what goes down must eventually come back up,” trying to play off the “what goes up must come down,” saying. That’s not necessarily true, and what we are seeing is something far different than any other point in our modern times.
I know the pain of losing much of one’s savings is great, and the desire to rebound from these losses can cloud your judgement. Don’t let your emotions influence your choices, and PLEASE don’t let the TV tell you what to do. These are the same idiots who are saying that the stock market and economy are doing great every time another big corporation fails. They get PAID to say everything is fine!!!!
Listen, any gains or signs of strength the markets get in the coming days is temporary, if you invest for the long-term you will lose it all. If not now then really soon there is going to be a systemic event which will cause a worldwide crash. If you are invested when this happens you will lose everything because these big corporations will be given permission to take your money to try to save themselves.
Naturally the people will be angry and take to the streets, but everything will be going down the crapper anyway. Look at JP Morgan and Washington Mutual, Morgan Stanley and Wachovia, Bank of America and Merrill Lynch… They are all merging, trying to become “too big to fail” that way they will get bailed out when they threaten to file for bankruptcy.
They are all on the verge, and our system is so intertwined that when any one of them fails the whole thign will come crumbling down and you will lose every penny. My suggestion is to pull it out, take the loss, and don’t regret your decision. Spend you money on tangible goods you can use to barter with in the coming years and pray for the best.
You probably won’t listen to me though. The people on the TV and newspapers and your friends will convince you that everything is OK, so I want you to remember my words: THE NEXT GREAT DEPRESSION IS COMING, YOU ARE GOING TO LOSE ALL YOUR MONEY AND I TOLD YOU SO.
OK, I totally agree with what the guy above me said, but maybe not as grim. I do believe that this bear market will last for a while, and these last couple of days are merely a short cover rally in a larger complex bear market.
It’s true, those people on TV are there for one purpose: entertainment. That’s it. Don’t take what they say literally. And don’t believe that just cause something is cheap that it’s a good deal to buy. That’s not true. Cheap does not mean buy. A stock can stay cheap for years. They don’t always come back up. You want to look for stocks, or funds, that are showing strength, not weakness.
I suggest you don’t add any more money into your funds until the market is showing signs of a turn around. And right now, all signs are pointing down.
Happy Trading,
Jun
http://www.tplinvestment.com
Pull out and invest somewhere else.
There are better ways to invest your money.
I have invested in my friend’s business and now I am getting guaranteed 40% annual interest. You may email me for more information (check my profile).
Don’t invest in stocks. It’s too risky.
I wish you success!