No. of Recommendations: 0
Mishushina: In part yous asked ...My question, should I reduce the amount I send to the mutual fund until the price drops, or should I just leave it be?...but with the mutual fund so high right now, I'm wondering if I'm investing Foolishly now? Is my money working best for me?

My $0.02:

Although mutual funds are made up of individual stocks, you should not look or think of them the same way you would think of a single stock. Hopefully, the fund manager is doing his/her job and buying and selling stocks/bonds to maximize return to the shareholders. The fact that a mutual fund is up, that is, higher today than it was a while ago, has nothing to do with the market sentiment that drives single stocks. It does mean that someone is managing the fund well and getting a good return on the invested dollar. A mutual fund will not go down because the public becomes disenchanted with the fund. It will go down if the stocks in which the fund is invested go down on average. If the fund manager does his/her job really well, the fund will never go down, and will only rise in value. The likelyhood of that happening is small (never going down, even a little bit), but over the long-term that is why you are investing in mutual funds. No matter how much it costs for a single share of a fund, the return on investment will be the same. (If you expect a 20% return from a fund at $10/share, you should expect that in one year, a single share will cost $12, and if it costs $100/share now, it will cost $120 a share in a year. With funds, it is all relative.)

Hope this helped, ask again if you have more questions.


PS. It is getting to be close to the end of the calendar year. Mutual funds still have to pass capital gains and dividends on to their investors. Be careful that you don't put money into your funds just before they declare dividends. You'll get some of your money back, and get the opportunity to pay taxes on it also.
Print the post  


The Retirement Investing Board
This is the board for all discussions related to Investing for and during retirement. To keep the board relevant and Foolish to everyone, please avoid making any posts pertaining to political partisanship. Fool on and Retire on!
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.