Does anyone else have money in this pig of a mutual fund. It has sunk almost 10% during the same time everything else is +10-20%. It represents about 1/5 of my investments. It used to be a high-flyer when it was 20th Century Ultra. So now the question is should I: Sell, buy more (because its 'cheap'), or just hold on to it?

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

Never grab for a falling knife.

__________________
Never a dull moment at Berry Hill Farm.

Great metaphor!

You should see my fingers, btw. I grabbed a falling machete one time.

I've got money in that fund. Yeah, they're certainly not flying as high as they did back when they were 20th Century Ultra. I've had money in it for 8-9 years and have watched if soar and plummet. It has been coming back recently.

I forget which index it is most closely aligned with, but that's usually the way I determine whether to raise, hold, or to fold.

If your portfolio is properly diversified, some of your holdings will be up when others are down. Keep that in mind, too. Good luck.

__________________
" We have nothing to fear but the main stream media itself . . . ."- Adapted from Franklin D Roosevelt for the 21st century

OBK #55

1998 Lincoln Continental - Sold
Max 1984 300TD 285,000 miles - Sold
The Dee8gonator 1987 560SEC 196,000 miles - Sold
Orgasmatron - 2006 CLS500 90,000 miles
2002 C320 Wagon 122,000 miles
2016 AMG GTS 12,000 miles

On funds the chance of a 20% climb in the near future are almost none. Pull the money out and tap into the international funds, personally I use loser money for long shot stocks.............thats how I roll.

I always tell people to invest in index funds, and your case is another great example of why.

Study after study has failed to show the link between good past results and good future results. In fact, good past results is a better predictor of poor future results than good returns due to the concept of ‘reversion to the mean’. The only consistent reliable predictor of good future fund return is low expenses. Funds with no loads consistently outperform load funds. Funds with lower expenses consistently outperform funds with high expenses.

Everyone wants to beat the market. Unfortunately it’s more difficult than you think, especially over the long term.

Investing is a zero sum game. Investors as a whole make up the market, so as a group, investors can do no better than the market itself. If one investor outperforms the market, another one must underperform it by a like amount.
Mutual fund costs diminish returns. If funds had no costs, investors as a whole would match the market’s returns. But after costs (sales loads, operating expenses, and so on), investors do less well than the market, or index, because the market, or index, doesn’t have costs.

Financial markets are efficient. Information is so readily available, especially about large U.S. companies, that it’s tough for any fund manager to sustain a performance edge over the long term. Some markets are less efficient (international and U.S. small capitalization companies), but they tend to have higher costs, which diminish their returns.

Index investing has an inherent cost advantage. The indexing strategy minimizes fund costs, which can take a large bite out of your investment returns. Index funds have:
Low operating expenses. Index funds expense ratios average 0.28%. The average managed fund has an expense ratio of 1.5%.
Low transaction costs. An index fund does little trading. An actively managed fund’s brokerage and other trading costs may reach 1% of assets annually.

Over time, the broad U.S. stock market indexes have outperformed general equity funds, on average.
Over ten years, the total return of the Wilshire 5000 (1989-1998) is 414.67% (average annual rate of 17.80%). The average general equity fund cumulatively returned 312.48% over 10 years (average annual rate of 15.22%).
In the last ten years 11% of managed funds beat the S&P 500 index. Over the last 15 years only 4% of actively managed funds beat this index.

Yes, that's right. Only a measly 4% of actively managed funds beat the passive index.

Your odds at picking an actively managed fund that will beat an index fund over the long-term are so bad that you would be better off gambling at Las Vegas.

Let's compare your fund to the Total Stock Market Index, the largest and broadest index fund available.

YTD, the index has earned 7.91%, your fund -7.05%
One year, the index has earned 10.25%, your fund -3.11%.
Five years, the index has earned 8.45%, your fund 2.82%.
10 years, the index has earned 8.56%, your fund 5.14%.

__________________
Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".

My money is coming out of my Putnam fund that I have had for 7 years next week. I'm tired of it bleeding red, my big mistake was not doing this 2-3 years ago.

__________________
2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Would you like to name the fund so that I can beat it up compared to the passive index fund?

__________________
Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".

Thanks for the replies. I am also troubled by American Century emails telling me, based on my current holdings, I should diversify into other AC funds to reduce my risk exposure. Are they expecting this thing to really tank?

If I 'diversify', it won't be with them.

__________________
1985 380SE Blue/Blue - 230,000 miles
2012 Subaru Forester 5-speed
2005 Toyota Sienna
2004 Chrysler Sebring convertible
1999 Toyota Tacoma

Putnum Voyager fund I think thats the title.

__________________
2016 Corvette Stingray 2LT
1969 280SE
2023 Ram 1500
2007 Tiara 3200

Ultimately... this man wrote the Bible of investing
http://en.wikipedia.org/wiki/Benjamin_Graham
"Graham exhorted the stock market participant to first draw a fundamental distinction between investment and speculation. In Security Analysis, he proposed a clear definition of investment that was distinguished from speculations. It read, "An investment operation is one which, upon thorough analysis, promises safety of principal and a satisfactory return. Operations not meeting these requirements are speculative." "

__________________
Phil
Previously loved
variety, but I miss the 99 F350 PSD- 37k, traded, damn

Current stable
98 E-300 TurboDiesel, 253k
http://www.facebook.com/people/Philip-Underwood/762882374

really, isn't the ultimate goal of capitalism is to make money.

Another fatal flaw of indexes and suginami's "go-it-alone" strategy is a long-term lack of strategic tax planning or tax management. This MUST be fit in.

Who cares if you make 9% to my 7.5% if you get taxed in retirement at a 35-45% rate and I pay none? and leave a sizeable estate to my family, church, fraternity, charity and school of my choice?

Now who did better?

Not paying taxes is better than paying taxes if you can do it and not go to jail.

__________________
Phil
Previously loved
variety, but I miss the 99 F350 PSD- 37k, traded, damn

Current stable
98 E-300 TurboDiesel, 253k
http://www.facebook.com/people/Philip-Underwood/762882374

I understand what you're saying, and it all applies to professional money managers, but the fact remains that index funds over the long haul consistently and reliably beat about 90% of all actively managed funds, managed by people who should know all of the stuff you are talking about.

Index funds have lower costs, are incredibly tax efficient, have significantly less risk, and have lower volitility than most managed funds because they are incredibly diversified.

If you are worried about capital gains and having greater tax efficiency, you can invest in ETF's.

__________________
Paul S.

2001 E430, Bourdeaux Red, Oyster interior.
79,200 miles.

1973 280SE 4.5, 170,000 miles. 568 Signal Red, Black MB Tex. "The Red Baron".