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Old 07-06-2009, 09:35 AM
 
Location: Asheville, NC
12,261 posts, read 28,584,774 times
Reputation: 5047

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As I sit here, my mutual funds continue to decline. I know they say just leave it in there for long term, but I feel that they are loosing way too much! The one I'm concerned with is TWCUX. I would think that would be a good mf with Walmart, Cisco, and Apple. Should I just leave it or move it elsewhere? I don't need the money, but I just can't bear to see it decline anymore.
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Old 07-06-2009, 10:36 AM
 
Location: Aloverton
6,564 posts, read 13,013,789 times
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Quote:
Originally Posted by beckycat View Post
As I sit here, my mutual funds continue to decline. I know they say just leave it in there for long term, but I feel that they are loosing way too much! The one I'm concerned with is TWCUX. I would think that would be a good mf with Walmart, Cisco, and Apple. Should I just leave it or move it elsewhere? I don't need the money, but I just can't bear to see it decline anymore.
With mutual funds, one needs to make a solid long-term bet and ride with it for some years. How many years have you been in this fund? If you are finding you can't stand to see it decline, I am more inclined to think that you misread your own intestinal fortitude when you chose the investment. (That sentence isn't meant to offend at all. It is like you figured you wouldn't get seasick because you had never done so before, then got on an old school sailing vessel and found out, oh good gods, give me that chuck bucket right now. You can't really know for sure until you hear the bullets whistling.)
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Old 07-06-2009, 11:28 AM
 
Location: Asheville, NC
12,261 posts, read 28,584,774 times
Reputation: 5047
Quote:
Originally Posted by j_k_k View Post
With mutual funds, one needs to make a solid long-term bet and ride with it for some years. How many years have you been in this fund? If you are finding you can't stand to see it decline, I am more inclined to think that you misread your own intestinal fortitude when you chose the investment. (That sentence isn't meant to offend at all. It is like you figured you wouldn't get seasick because you had never done so before, then got on an old school sailing vessel and found out, oh good gods, give me that chuck bucket right now. You can't really know for sure until you hear the bullets whistling.)
I've had it for about 9 years now. So, are you saying to just leave it for the long term? That was my intentions, but I thought that you would see at least one year of growth, not all declines?
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Old 07-06-2009, 11:34 AM
 
Location: Atlanta, GA
1,194 posts, read 1,908,420 times
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I have no hope for the economy. Our green bubble is going to be weaker than our housing bubble which was weaker than our tech bubble.

http://www.city-data.com/forum/inves...all-least.html

Take a look at PTTDX. Reasons listed from the link above. Also, over ten years, your money would've nearly doubled, while you'd be down about 20% if you invested in the DOW.
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Old 07-06-2009, 11:47 AM
 
Location: Aloverton
6,564 posts, read 13,013,789 times
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Quote:
Originally Posted by beckycat View Post
I've had it for about 9 years now. So, are you saying to just leave it for the long term? That was my intentions, but I thought that you would see at least one year of growth, not all declines?
I'm not necessarily saying to just leave it for the long term. You've already done that, but until you said so, I didn't know how long you'd been in it. If it had been just a year, that would be different.

I just looked at the fund's performance chart and data. It seems to have gone through a lot of management changes, which is rarely a good sign. However, it hasn't been all declines. It declined from 2000-2003, grew from 2003-2007, then took about as spectacular a dump as most other funds have done. Looks like by now the 10y numbers show it's down about 20% net, though for you that would depend on exactly when you bought in (my numbers presume 10 years ago today). Its growth of a dollar has underperformed the S&P, which is relevant because it's a large cap growth fund that can reasonably be measured against the S&P.

You could always wait for it to recover and get your money back, if you think that will happen, bearing in mind of course that just getting your 1999 dollars back isn't really getting them all back because of inflation and because of lost opportunity while the money was tied up. Or you could say the heck with it, and switch into an index ETF where you wouldn't have to stress about a revolving door in management.

If you want to check my info:

American Century Ultra Inv (TWCUX) | Performance
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Old 07-06-2009, 01:53 PM
 
Location: Asheville, NC
12,261 posts, read 28,584,774 times
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Quote:
Originally Posted by j_k_k View Post
I'm not necessarily saying to just leave it for the long term. You've already done that, but until you said so, I didn't know how long you'd been in it. If it had been just a year, that would be different.

I just looked at the fund's performance chart and data. It seems to have gone through a lot of management changes, which is rarely a good sign. However, it hasn't been all declines. It declined from 2000-2003, grew from 2003-2007, then took about as spectacular a dump as most other funds have done. Looks like by now the 10y numbers show it's down about 20% net, though for you that would depend on exactly when you bought in (my numbers presume 10 years ago today). Its growth of a dollar has underperformed the S&P, which is relevant because it's a large cap growth fund that can reasonably be measured against the S&P.

You could always wait for it to recover and get your money back, if you think that will happen, bearing in mind of course that just getting your 1999 dollars back isn't really getting them all back because of inflation and because of lost opportunity while the money was tied up. Or you could say the heck with it, and switch into an index ETF where you wouldn't have to stress about a revolving door in management.

If you want to check my info:

American Century Ultra Inv (TWCUX) | Performance
Thanks for the opinions. I've lost about half of what I've invested. You're right though, it did start to pick up for a little bit, but then tanked. I have tried not to look at it over the years, but recently with the way the economy is, it's got me concerned.
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Old 07-06-2009, 02:31 PM
 
Location: Aloverton
6,564 posts, read 13,013,789 times
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Quote:
Originally Posted by beckycat View Post
Thanks for the opinions. I've lost about half of what I've invested. You're right though, it did start to pick up for a little bit, but then tanked. I have tried not to look at it over the years, but recently with the way the economy is, it's got me concerned.
You must have had very unfortunate timing, buying at its very peak in Spring 2000, when it was outperforming the S&P (which it is not doing now). Unfortunately, the only answer I can give to that is "Yeah, it happens." At the time, of course, we can't know the future, or we would obviously do differently.

Certainly it's not a fund I would get into, even now, simply because I strongly dislike the management changes. If you're sick of them but still want to participate in any market recovery that may occur, you can switch into an index ETF such as VTI (Vanguard Total Market Index ETF). However, ETFs work differently than conventional funds like the one you now own, and you should fully understand those differences before you make a move.
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Old 07-06-2009, 10:22 PM
 
3,313 posts, read 4,311,709 times
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beckycat-

I know that this will sound flippant, but just say NO to mutual funds.

That your fund has gone down does not matter much to the management company, they will get their 1-2% annual management fee. So, for example, if you had a NAV of ~$10,000 in the fund last year, they took $100-200 from you for "managing" your money. Do you feel that you have gotten $100-200 of management value from them in 2008? Did they pay you a distribution at the end of Dec 2008?

I used mutual funds for several years to bulk up my savings until I had enough to build my own portfolio. I dumped all of the mutual funds four years ago (except one), and bought the shares of companies directly using an online broker/custodian. I now have a portfolio of 20 companies, spread across 7-8 sectors, all dividend-payers, and my portfolio is back in the positive range. Dividend-paying stocks are the way to go.

I know that it is difficult to sell out of a fund when you are in a negative return position, but it is wrong-thinking. You have to look at the money remaining and ask yourself: what is the best use of this money? To leave it in a poorly-managed fund? (The high turnover of managers that j_k_k discovered may be an indication of internal problems.) Or to take control yourself?

The only time to use mutual funds is when it is hard to pick a winner (such as small caps) or you want to invest where it is difficult to diversify yourself (closed-end overseas funds). Other than that, pick good companies yourself.

For example, I own both CVX and JNJ. When CVX was soaring (price of oil up), JNJ was down. Now, JNJ is up, and CVX is down. I don't care. The dividends from them are growing 12-14% annually, much better than a bank, a CD, or a bond.

You can make these decisions yourself, with free advice garnered from reading blogs, forums, etc. There is collective wisdom out here in FreeAdviceVille; much less wisdom from one single mutual fund company that is, ahem, trying to build their own wealth.
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Old 07-08-2009, 09:42 AM
 
Location: Houston, TX
17,031 posts, read 28,168,417 times
Reputation: 16218
Quote:
Originally Posted by Teak View Post
beckycat-

I know that this will sound flippant, but just say NO to mutual funds.

That your fund has gone down does not matter much to the management company, they will get their 1-2% annual management fee. So, for example, if you had a NAV of ~$10,000 in the fund last year, they took $100-200 from you for "managing" your money. Do you feel that you have gotten $100-200 of management value from them in 2008? Did they pay you a distribution at the end of Dec 2008?

I used mutual funds for several years to bulk up my savings until I had enough to build my own portfolio. I dumped all of the mutual funds four years ago (except one), and bought the shares of companies directly using an online broker/custodian. I now have a portfolio of 20 companies, spread across 7-8 sectors, all dividend-payers, and my portfolio is back in the positive range. Dividend-paying stocks are the way to go.

I know that it is difficult to sell out of a fund when you are in a negative return position, but it is wrong-thinking. You have to look at the money remaining and ask yourself: what is the best use of this money? To leave it in a poorly-managed fund? (The high turnover of managers that j_k_k discovered may be an indication of internal problems.) Or to take control yourself?

The only time to use mutual funds is when it is hard to pick a winner (such as small caps) or you want to invest where it is difficult to diversify yourself (closed-end overseas funds). Other than that, pick good companies yourself.

For example, I own both CVX and JNJ. When CVX was soaring (price of oil up), JNJ was down. Now, JNJ is up, and CVX is down. I don't care. The dividends from them are growing 12-14% annually, much better than a bank, a CD, or a bond.

You can make these decisions yourself, with free advice garnered from reading blogs, forums, etc. There is collective wisdom out here in FreeAdviceVille; much less wisdom from one single mutual fund company that is, ahem, trying to build their own wealth.
Good post...or at least its in line with my thoughts. I too started out putting my retirement money in mutual funds (20 years in), but as I looked at the performance over time I wondered if I couldn't do better myself. I thought the funds would protect me from big losses in a single stock (PFE and GE in my case), but it seems my losses on individual stocks were not as bad due to the dividend reinvestment. I have been moving out of large cap funds, toward stocks. Trying to be diverse (ADM, MMM, MRK, FCX, DD, F, etc). I am leaving the international and small cap stock funds alone because I dont have the time to track them.
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Old 07-09-2009, 10:36 AM
 
22,770 posts, read 27,724,444 times
Reputation: 14617
I dislike mutual funds.

It feels like you are paying someone to hide your money from you.

I would consider buying into a mutual fund if I had great faith in a particular manager, or had regular face-to-face meetings with the mutual fund manager. Obviously that doesn't happen for someone like me.
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