Do I stay in American Funds in this market?

Question

I currently hold approx. $54000 in AEPGX AGTHX ANWPX CWGIX ANCFX AIVSX CAIBX PEGBX FSGCX and have lost around $4000 in the last four weeks alone in this market. Is it time to start thinking about getting out, and hedging my bets in something less volatile, or do you think this market will correct itself?

Answer 1

From the size and variety of your portfolio, I expect it has taken you some years to put it together.  If you bail out and it is not an IRA account you will be on the hook for taxes plus you will have lost the up front sales charge you paid to get in in the first place.  I know thing are bad.  I can see it in my portfolio also.  I admit I have been selling a few things but on balance I have bought much more than I have sold.  

The old saying on Wall Street is that when the blood is flowing in the streets, it is time to buy.  This may be just a little soon to buy but it is difficult to know exactly when that time comes.  I would be sorely tempted to add to AEPGX at this point.  But why is it you do not have a money market fund? You should and it should contain about 10% to 20% of your investments.  It is times like now when those funds would come in very handy.  

If there is money to be pulled out, in my way of thinking it would be the money in FSGCX.  With inflation running at 6% and ready to go to 10% that is the money I would save.

Answer 2

This is a buying opportunity.....why get out when it is down?  Equity funds are not savings accounts and the market will do better.  Hang in there.