I have an IRA in american funds that have been loosing money,should i keep it or bank the money.?

Question

4 sections each funds A 1=New perspective 2=Smallcap world fund 3=investment company of America 4= American Balanced ,in recent months they have been loosing money in october 2007 it was 8,100.00 in april 2008 down to 7,200.00 what advice do you have.

Answer 1

Forget american funds  that have been loosing money.

Put $5,000 into a high interest fixed rate account overseas and you will earn 12% per year. You will get back $8,811.70 after 5 years.

Answer 2

You could take it out, but then you'll be SO MAD 20 years from now when (had you left it alone) it's worth around $70,000*.

Those funds are ALL "long-term" investments, it's foolish to monitor their performance month to month.  Leave them alone, and try to only look once a year, that way you'll only see the growth instead of only seeing the "turbulence"....

Answer 3

Retirement investing is long-term.  As long as you have five or more years to go, you should stay put.

Answer 4

Though the funds are losing value, keep in mind many of similar funds offered by different companies are also going down.  That is because we are in a 'bear' market.  These funds will eventually rebound and exceed in value, but if you panic and try to get out, you will lose that money and hopes you had of it growing.

Also, keep in mind, if you are under 59 and a half years of age, you are subject to a 10% tax penelty if you take the money and bank it and you will be required to pay additional taxes on it (possibly state taxes too depending on where you live)

American Funds is a well managed fund.  The expense ratio for them is lower than many of the competitors and you can expect the dividends to be better than most competitors.  You are best to stay where you are at.

Answer 5

I have 3 of the 4 American Funds you mentioned in my Roth IRA. These are long term investments. Stay the course and keep contributing. The market as a whole is down right now...it's the best time to keep investing, because the stocks your funds invest in are now at a discount.

If you just put the money in a bank it will lose value over time due to inflation.

Answer 6

American Funds are a LOADED fund company......they are not the mutual fund company for beginners.

The only way you can surpass the 5.75 sales charge is by investing 500,000 or one million dollars hence the reason why they are one of the largest mutual fund families available because super rich people put their millions in with them not beginner investors.

I am going to assume that you have invested $8,000 so far.

On that contribution you have paid a sales charge of $460.

Just to get back to even your mutual fund will have to return 5.75%.

I could go on and on but trust me, as someone who started investing with American funds they are a horrible in fact life changing investment mistake.

Answer 7

The American Funds are one of the best Mutual Fund companies in the USA.

My suggestion....... don't do anything (except fix your asset allocation).  In 5 years you'll be glad you held on!!!!!

You're over weighted in the more aggressive funds (which is not their forte').  Look at the EuroPacific Fund. It's one of the best funds in the world... and you're not in it