Mutual fund dropping (rapidly), what should i do?

I just bought this fund two weeks ago, it went up a bit and suddenly just last week till today, i lost over $700 alone in this mutual fund. what should i do?

This is your wake up call to learn about risk and take a look at your risk tolerance. If you are concerned about this loss, you probably went after a fund that had good PAST returns thinking it was safe and have no idea that investing is a long term prospect. And you bought high.

This is your opportunity to sit down and learn about how to invest properly. The biggest losers are people that panic when the market goes down and then sell low after buying high.

Here's how to set up a good portfolio:

http://www.amexsux.com/cgi-bin/yabb/YaBB...

I suggest Vanguard index funds.

Vanguard's index funds:

https://personal.vanguard.com/...

Target retirement funds:

https://personal.vanguard.com/... Report It

Time to cut losses. You can top up the margins should you think there is a chance for rebounds to happen.

First, I hope you invested in a fund that had no commissions-front loading or back loading funds. No-loads are the only way to go. Second, if your fund is broadly diverse, like the S & P 500 or Wilshire 5000, I would hold onto it for the rest of your life. Right now the market is slow growth. Two weeks is nothing. That said without knowing what fund you purchased and what fund family, it's impossible to advise you. Over 30 years, if you just equal the market, you will beat all but a handful of the best investors in the world-that is why I invest in index funds. The best mutual funds are the most borning ones that have little or no turnover

don't worry it w'd rebound back at d end of the day.u must always keep track everyday.good luck.

First, what percent of the total investment is $700? If it is more than 10%, worry. Most traders (I'm one) set their stops on individual positon to limit losses to 8-10% maximum. And a mutual fund is supposed to be a more conservative investment that a trader would do, so that is a fair yardstick.

When you bought it, did you think it was a good performing fund? If you answer yes, so why is it bad now? Because the market went screwy the past couple of weeks? Do you regularly put money into this fund?
OK, here is my rationale to the questions, your fund like mine (I have 15 ) have gotten kicked down, but that's because the entire market went down, not just our funds. What caused this market to go lower was all this sub prime mortgage crap, where all the financial companies have taken a beating and nobody knows for sure who actually holds this stuff. So if you tell me your fund deals exclusively in financial stocks, yeah I guess I would be worried too. If not, then hang in there, in fact if I'm a believer in this fund, I probably would buy more (dollar cost averaging) if I'm a long term holder.
Lastly, check with your broker or whoever sold this fund and ask what the morningstar or lipper ratings are. If 3 stars or higher, you are OK for the long haul. If less, find another broker.

Mutual funds are designed for long term investing. They will, to a degree, go up and down with the market. Trying to time the market by jumping in and out of mutual funds is futile.

If you thought it was a good fund two weeks ago, has anything changed about it? If not, stay with it. Review its performance quarterly relative to its peers. The time to sell is if it badly underperforms its peers or if it just no longer suits your investment goals.

Hello,

The stock market is unpredictable and so are mutual fund returns. Prior to the credit crises that intensified in August, volatility had been very low for about 5 years and may have lulled some people into a sense of security and/or safety. Market corrections are normal and happen from time to time. If losing 10% or more of your money is making you lose sleep and is giving you anxiety, perhaps you should reevaluate your risk tolerance and review your asset allocation to determine if your portflolio if appropriate for you. In general, the more risk you take, the higher your returns are likely to be. With that said, taking greater risk will usually result in a higher probability of incurring short term losses.

I hope this helps.

Michael A. Weiss, CFA
The Editor
The Mutual Fund Investor
http://www.mutualfundinvestor.net