My portfolio is down 9% since 1/08 to today's close. It consists of 26% equity funds and the rest are bond

Question

funds and cash. It's slightly better than the Dow which is down l4.46% and less than the S&P which is down 12.94.

I am terrified at this amount of loss. Comments, please.

Answer 1

Don't worry. Your portfolio is still doing good even if it is down 9% for the year. Drawdowns of up to 25% are acceptable, and recoverable in the medium term.

Also consider that the economy is not doing as good. Accept it as part of the game. Being emotional about it might make you take action you might regret in the future.

If the Dow and S&P were up but your portfolio is down, then you start worrying.

Hope this helps!

Jim http://jsforex.blogspot.com

Answer 2

yeah, that is bad.  

to offset a 9% loss, your portfolio will have to go up by 11% over the next 6 months.  That's a 22% annualized rate of return.

What do you think the chances are, of the stock market going up that much in 6 months?

Especially with the high oil, high inflation, high unemployment,  housing crashing, US dollar in the dumps, and higher taxes coming because our politicians need to keep spending.

I really don't think that you should panic and sell out, although I would be very tempted to do that.  In fact, I sold out most of my IRA mutual funds about 2 weeks ago, so that in hindsight is good.

But, to take advantage of the inevitable recovery, I must be in mutual funds - hence I will wait for the market to go down to the mid 10,000 level ( my guess is 10,600 ) before I go back in.

You have a tough decision to make.... I wish you well.

Answer 3

Are you investing each month into a retirement fund or is it just sitting there? If you are putting money in each month, It's great because your buying stock on sale. Which we know will go back up. Learn about dollar cost averaging. If it's just sitting and liquid or not, you should move(25%) it to more stable or safer equitys like gold miners(ETF's are doing well) or commodities. Your really not doing to bad but if your sweating it because of your age and you don't have to much time before you retire, look for a grenteed % return Annuitie with a step up program. The market should turn around in 18 months. I look at the market as if it's on sale. Like shoes, buy one get one free. Talk to your analyst if he's Life Licence he can do an Annuitie. I don't know anything about you so it's hard to answer. I hope I helped some.

Answer 4

9% is about normal for a time like this. I wouldn't be terrified about the losses, however I would be terrified about owning 65% bonds. Not bad if your older, but for a younger age you will have plenty of time for the stock market to rebound with stocks.

Answer 5

You may just be a bit cautious...very heavy in bonds ( unless you're either 80 or just extremely careful )  

You are comparing relative losses as though that's a " good thing"...not necessarily so...some people have MADE money since 1/08....

Look at CGMFX....or more cautiously FAIRX... or in " sectors"  ICBMX in materials....FNARX in nat/resources

... almost any " energy" stock or fund... agricultural chem companies or ETFs...

...or just look at the " holdings" of some of the funds above.

Sometimes, " the trend is your friend".... but if you still want caution ... look at HTE or PWE... look at an international bond fund like FNMIX...

Don't " settle" for being better off than losing indices...get active and MAKE money...at least defend what you've got... you don't HAVE to stand there and watch it wither away.

Answer 6

if you are a long term investor it's gonna be ok. what you have sounds like it's got alot of housing/mortgage market which is suffering right now but will be temporary.  You are probably not the type to invest in the stock market by yourself so my best advice would be to chill out for the next 4 years, don't even look at your portfolio or worry about it, and when this oil bubble has burst and the mortgage crisis is over you'll be happy.