I have about 60k invested across three mutual funds. One is down 15%, one is down 11%, and one is down 14%. Should I be considering pulling out at this point? This money isn't my life or anything, but I was kind of hoping to keep it positive as this was what I was planning to use on a house and some other things going forward, not to mention supplement retirement savings.
I have a question too, who's offering the highest rates for a short term CD right now? Mines up in 5 days and I need to line something up for it or ill spend it!
When you say "down" what do you mean? Down for the year? Year to date? If there is a mutual fund out there that isn't down for the current year to date, I sure would like to know. I recently rebalanced my account and put 100% into bonds. But I didn't change my current allocations. That way, as the price of long term growth mutual funds continues to go down, I will keep buying shares. But most of my money will be in a more conservative investment.
open an hsbc checking acct. i think it's at 3.5 % and you have access to your money anytime you want it.
If you need money in the near future (i.e., less than 5 years), then sell during the next rally. If this is long-term money, then keep contributing more money. The real money is made by investing well during the bear markets. Those funds seem to be giving you an approximate market return. If these are actively managed funds, you should switch to index funds, which have lower expenses.
We just had to do this recently. We ended up spreading several CD's among local/regional banks (I'm in Florida) averaging 7-9 months at 4-4.25%.
wamu is at 5% for one year. Wamu also had bankruptcy concerns a month or two ago. Credit unions will probably offer better rates.
High CD rates can be a sign of a struggling bank because it means that they are desperate for deposits.
mutual funds (at least for me) are extremely long term......like when I retire. so as long as the value has gone up over the last 10-15 years, im not too worried about swings like that.
I just dropped a little change in an agressive bear fund that has been hitting on all cylinders for several months. I'll ride it out for a while and pull out when the market seems like it's gaining its momentum again. Otherwise, IMO, just ride out the storm.
When you make regular contributions to well established mutual funds over the long term, you don't really care about up or down. If you are serious about the long term returns, you should buy when they are down, just like you would buy in good economic times as well. The goal is to average out the downs with the ups and vice versa to average out a steady return in the long term.
Speaking of expenses, what are reasonable gross expenses? I think all of the options in my 401k have gross expenses of 2-2.6%.
They are an internet bank. If you want to make a quick $25 at another internet bank, then move the money to HSBC, give me a shout.
Another factor to consider is that, if you expect the mutual funds to come up again (and historically they do), then it's in your best interest to stay in them. If you sell now, you lock in your losses. On the other hand, if you stay in (and keep putting money into them), you're getting discounted shares and you'll really see a benefit when they go back up. Something to consider. That's what an investment guy would tell you.
