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Well, here is the thing. A mutual fund manager gets a cut of the assets under management. If the market is going down, he would rather have a cut of a declining balance than nothing at all. So he will never tell you to sell. That is really simple.

Actually, a bit too simple. Managers are generally restricted to investing based on their prospectus.

An equity index fund manager CAN'T simple go to cash because it would be a violation of their prospectus. If the manager was wrong and the equity market continued to grow instead of contract, the manager and the company would be sued.

Most funds can no more go to all cash than all cash funds can simply go all stock.
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