I started my 401K 18 months ago, and I selected a few funds among the ones offered by Merrill Lynch. Despite the great market, they managed to lose money in almost all of them! A few months ago, when they started offering an index fund, I asked that all my future contributions go to the index fund. But what should I do with the other funds? Should I leave them to their own fate, or should I cut the loss, sell them and put the money in the SP500 index fund? Any advice?
I would transfer the previous contributions to the index fund--unless you want to diversify your holdings. As you have seen in other postings, some people prefer a combination of index fund, small cap and international funds for stability.Don't be concerned if all you funds do not exceed the SP500 index every reporting period. But if they miss for two years in a row, its probaby time to move to new options.
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