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You are here: Experts > People/Relationships > Retirement Planning > Mutual Funds > ira-mutual funds
Expert: John D Smith, CFP
Date: 3/7/2008
Subject: ira-mutual funds
Question
I now have all my IRA investments in 5 mutual funds, as I have been advised by my bank's investment manager. Right now, I'm losing a lot of money and wonder whether I should take a loss and re-invest in CD's and bonds, something that will not lose value. I was originally told that I will not lose the principle, but when I read the disclosure with my statement it seems to say otherwise. I will be retirement age in seven years.
Answer
The important thing to remember with investing is risk and return. The higher the return you expect to earn, the more you need to be willing to accept the ups and downs of the marker. One way to help put this into perspective is to have your investment manager run a retirement projection for you that helps determine what you need to earn on your investments to meet your goals during retirement and then see how your portfolio's longer term return expectation matches up to this. The one issue with selling now and investing in bonds or CD's is that you are selling after the investments have dropped in value and will not benefit from the markets rebound, which will eventually occur. I hope this helps.
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