What I hate about mutual funds

Is the way you don't know what you'll get until they're sold and what they cost until they're bought.

I'm looking at the US markets (inexplicably, to me) go up, and I'd love to get out of some things I've decided to dump, but what if it takes a dive in the last five minutes?

Plus it is disturbing my sleep at night. I'll probably be at a net plus (barely) at the end of the day today, but I'm really thinking I'd rather pull it all out and dump it in some CDs.

I finally got the nerve to try mutual funds in 2005, and at one point I was all giggly because I had $9K profit. Now that's all gone, and I'm a hair in the hole. I just don't think I have the temperament for this, especially the way things are now.

Thank you, anyone who reads this, for listening to me moan.

Depending on your age, you might just want to sit tight and buy some more into your funds. If you are under 40 it might be worth your while. I know they can be nerve wracking.

But I gotta sell the ones I decided I don't like after observing their behavior, especially this week.

I'm 56, and I'm also one of the people who thinks the whole world economy is going to blow up. For example, I don't see how we can get out of the hole we're in except by hyperinflation. I'm not an expert, but I don't see what can be done about the national debt except to inflate our way out of it. I'd love to be proven wrong.... ;)

your money in the market not and watch it disappear. The Ponzzi scheme is breaking down.
Now is the time to buy real income producing property without getting into debt.

I don't need tax free investments, though - not in a high enough bracket. All my money except a little bit of safety money is in my IRAs, and it doesn't make sense to have tax free investments there.

Get it Tax free at 3% any your effective rate is 3%.

On the other hand if you have any Credit card debt and you pay over 3 % on it PAY IT OFF.
You can effectively pay (reward) yourself whatever your CC debt rate is.

Just big holes in my savings for vet bills - we've been hit with a lot of illness and death in the past year or so.

and despondent when they go down, investment is not for the faint hearted.

Just realize that no matter what those numbers say, you own exactly the same thing whether they're up or down. Unless you're planning on using that mutual fund for collateral to go more deeply in debt, the numbers are largely meaningless at this point.

Selling in a panic when things are going down is just as foolhardy as buying when it looks like a bubble market is going to last forever. We're in serious trouble all over the world because too many people did the latter. Bubbles burst. Bear markets don't last forever (although it feels like it).

The market still has a lot of room to go down before we are rid of Stupid, and I think it will. While it's tempting to pull your money out now and stuff it into a mattress, don't forget you'll have to pay fees on the way out and on the way back in. You'll not only lose what you've lost in terms of paper value, you'll have lost real money in fees and that money in a mattress not only won't be earning anything in terms of interest, it's a thief magnet.

If you're still under 50, sit tight. If you're over 50, make sure you're well diversified and sit tight.

I just planned on getting out of some stuff that hasn't been doing as well as others, hopefully at the end of a period of time when things have at least temporarily turned up. Which is hard to do with mutual funds - you don't know what you'll get until *after* you've put in your sell order, brooding on which prompted my post.

I think I'd be a lot happier with fewer funds - I don't like keeping track of things.

My picks were things with long-term managers who did well or not too badly in the last down market. Some have done a lot better than others over the period of time I've owned them.

As my principal and interest sit right now, I'd have been better off in CDs - I'm a few hundred in the hole relative to my initial investment, probably a few hundred to the good tomorrow if the market doesn't take a dive in the last few minutes.

Exchange traded funds allow you to buy and sell at your price and still be diversified.

Are they just indices, or is there such a thing as a managed one?

I've heard that a few companies are toying with actively-managed ETFs, but I'm not sure who.

My personal feeling is that ETFs are great if you have a pretty big chunk of money and you want to do a one-time investment.

But if you want to dollar-cost average and systematically invest a little every month, the transaction cost on the ETF is a bit prohibitive. A no-load mutual fund might be better for systematic investing.

/ $0.02

Is dumping my tax refund into my Roth every year, and buying things in chunks. So that aspect of ETFs would work for me. But I really like to find managers with a history of beating the market, especially in downturns.

with a track record of any length. It's too bad, 'cuz that does sound like a good move for what you're doing in your Roth.

But that's a lot harder than just looking at the fund profile on Yahoo!

Powershares has a few, as does WisdomTree/Dreyfus.

http://www.etftrends.com/2008/09/recent-markets-could-keep-active-etfs-in-the-headlines.html

Not enough of a performance history for my tastes, just yet.

Or only very little in equities.

I'm still fully invested in diversified stock funds, but I have a high risk tolerance and a 25-year time frame. This stuff doesn't bother me.

I've been less and less happy as the bailouts and printing more money continue. I have visions of the markets going down and inflation going up. Wheelbarrows of money, etc.

Edited to add that I had been ignoring my Scottrade account for quite a while, which is what I wish to do.

A combination of the financial events of this week and the fact that I have an unwanted week-long vacation due to Ike caused me to look at it today.

I was actually kinda pleased to be only a few hundred in the hole, except for the fact that I think the house of cards sways just a little more every day.

I just know (okay, strongly believe) that this, too, shall pass. It may take a few years, but the economy and market will bounce back, and my mutual fund shares will go up in price. Meanwhile, I buy more shares and reinvest my dividends while everything's cheap. Like I said, I'm okay with that.

If you're worried, or nervous--there's nothing wrong in that. Your strategy and plan has to be something that YOU can live with. It doesn't matter what anyone else is doing. You do what you are comfortable with. If it's money markets and CDs for a while, that's fine. If it's cash in the mattress, that's fine, too. If it's investing in a Beanie Baby collection...well, I can't really condone that.

I'm just concerned, especially at my age, at how far down and how long til back up.

And continue to be really annoyed that you can't know how much you're gonna get for your mutual fund shares until you've made the commitment to sell them and the transaction has gone through.... :grr:

I shoulda done ETFs in the first place, I guess, but what I was looking for was long-term managers with a good record in downturns, and ETFs were (are) too new a product for me to be able to look at that.

If you buy shares of a mutual fund, that fund may invest in 50 different companies, or 100, or even 500. So you often have diversification across several industries and sectors.

Plus, even if five of the companies your fund invests in go bankrupt, the other 95 don't, so your share price won't drop down to nothing. All 100 companies would have to go teats-up before your investment was worthless.

But there is still significant market risk. And you still need to diversify among different types of mutual funds--large cap, mid-cap, small-cap, growth/value, international, bonds, etc.

I can tell you from much research that there are a lot more actively managed mutual funds that *don't* beat the market than those that do.

I just looked at the Dow chart, and, assuming I'm in the black at the end of today, I've actually beat it since 2005 with the funds I'm moaning about (some of them). And that's including some that I still think are good that I bought just before they took a dive.

I just don't know if it's possible to straighten out this mess the vultures have gotten us into without a catastrophic adjustment. That doesn't mean I know where to put my money in that event - it just means I worry about it....! ;)

unless you had a *lot* of money. And that's all they do in the case of index funds - just let you have a little piece of everything.

The actively managed funds add trying to beat the market, but few do.

compares to the S&L meltdown, the Great Depression, etc.? It seems a lot worse to me, at least potentially, but I don't claim to be a historian of any sort, much less a financial one.

BTW, thank you all for the words of advice and comfort!

Edited for inevitable stupid typo.