My mutual funds are down over 30% from where they were a few months ago! But I haven’t touched them. Now what?
Question by “Kh a a a a a n n” ! !: My mutual funds are down over 30% from where they were a few months ago! But I haven’t touched them. Now what?
They are basically a collection of investments in big, blue chip companies – all very conservative investments. They are, in fact, such low risk investments that I have long believed they are not a great investment. But I’ve had them for a long, long time.
I do not need the money now. I can wait for years if I need to.
My only worry is, will they lose a lot more?
What’s the best thing for me to do with them? Should I just ride out the whole thing?
Best answer:
Answer by AJ
Actually right now is the best time to contribute to your mutal funds.
I would not recommend cashing them out. However, you should talk to a financial expert and see if rolling over into a different mutal fund will better serve you.
Know better? Leave your own answer in the comments!
If you are still ahead of what you paid for your bull funds, sell and move the money to bear market funds. They are all showing stellar results this year.
As long as you have an asset allocation model that meets your risk tolorence and goals… you’ll do fine.
This would include;
Bond Funds (different maturities)
Large Cap Funds
Mid Cap Funds
Small Cap Funds
International Funds
Reits
CD’s
Money Market Funds
The percentage of each would ultimatly measure the risk you’re taking.
Having just “big, blue chip” companies is not “conservative”… it’s especially risky if that’s all you have. Because you only get the upside of one part of the investment universe.
If you don’t need the money than pretend their not there. I believe the market will fall lower. Dow could reach 8,500 or maybe even 7,500 and S&P could go down to 800. It sounds really scary but it could happen. Earnings are gonna be horrible. You could sell and take the loss and file for capital loss on your taxes (form 533). Good luck!
Bear markets come and go, below you will see that we’ve experienced several over the last half century. Some could argue this is the best time to buy, as prices are low. Just keep in mind your goals, you’re in this for the long haul and you will experience market declines over your investment life. The market will rebound, it just may take some time – so keep investing and you will gain back more than you’ve lost.
The last ten bear markets:
August 1956-October 1957 Lasted 14.7 months, -21.6% market loss
December 1961-June 1962 6.4 months, -28.0%
February 1966-October 1966 7.9 months, -22.2%
November 1968-May 1970 17.9 months, -36.1%
January 1973-October 1974 20.7 months, -48.2%
September 1976-March 1978 17.5 months, -19.4%
January 1981-August 1982 19.2 months, -25.8%
August 1987-December 1987 3.3 months, -33.5%
July 1990-October 1990 2.9 months, -19.9%
March 2000-October 2002 30.5 months, -49.1%
Source: Standard & Poor’s Corporation.