Should I sell my mutual fund or drain savings?

Question

We are getting married in 2.5 weeks, and have some big bills to pay. We have enough in savings to cover, but then we would be drained. I also have mutual funds that are 11 years old, and have dropped 18% in value in the past 6 months. I'm really frustrated w/ the mutual fund. We also have credit card debt, although at a low rate, we would like to pay that off, too.

What should we do to pay the bills?

A) Sell mutual funds

B) Drain savings

C) A little of both

Answer 1

If you can avoid selling out of the market right now, avoid it.  You're right - it's a bad time to sell.

Pay cash if you can.  I don't recommend floating stuff on a credit card, but if you have the money to pay off the CC, and it keeps you from completely wiping out savings knowing that you'll have another paycheck come in between now and the bill, that might be smart.

At 2.5 weeks, you're probably committed on most everything.  If you were still planning part of it, I'd have recommended paring back somewhat.

Answer 2

For you  C. A little of Both.  Try to keep a good cash flow supply of about 2 months of expenses in cash or near cash (just in case).  The balance from mutual funds.

But you did not say how much the funds have risen over the past 11 years, will you have to take a tax hit on the funds when you sell ?  I know the last 12-18 months have been killers (Mine are also done a bit), but I'm holding on for the long term (another 15-20yrs)

Answer 3

Depends on your goals. The stock market isn't great  & won't be until about 2-3 more years. Liquidating your funds now would be a good idea UNLESS you invested for the long term. Then I would suggest draining your savings & when possible, invest more in the funds. The old saying is Buy Low, Sell High. Right now is the time to "Buy Low"

Answer 4

Transfer your mutual fund to a fixed annuity like New York Life or Security Benefits. They deal in insurance cos and has nothing to do with the Stock Market. You'll only get about 5% on the returns but you can't lose. You can also withdraw 10% per year without being penalized. Your Bank should be able to help you with it.