I have some very conservative investments, mostly mutual funds. What will happen to them in a deep recession?
Posted by admin on 17 Mar 2008 10:41 am. Filed under Investing.
The Gorn King asked:
I have some mutual funds which are made up of very conservative investments – nothing too risky. Over the past few decades this fund has done nothing but grow slowly. Sometimes it goes down a bit, sometimes it spikes a bit, but overall it shows a pattern of growth, which is great.
I have some mutual funds which are made up of very conservative investments – nothing too risky. Over the past few decades this fund has done nothing but grow slowly. Sometimes it goes down a bit, sometimes it spikes a bit, but overall it shows a pattern of growth, which is great.
What will happen to these investments if we go into a bad recession?
Will they decrease in value a lot?
Should I try and head this off by changing my portfolio? Or just ride it out?
On March 18th, 2008 at 11:21 am
I have read that if you’re not going to buy individual stocks, that your best choice is Vanguard’s S+P500. It has by far the lowest fees of all the mutual funds. Apparently mutual funds are sneaky when it comes to charging you fees and they’re hard to see. Vanguard’s S+P500 is a slow and steady horse with virtually none of these fees. I think it averages around 9-12%. I’m not an expert though, so do your own research.
On March 20th, 2008 at 7:01 am
Generally, very conservative investments lose less value than riskier ones during recessionary periods. The upside potential is lower, but so is the downside. Definitely ride things out.
On March 22nd, 2008 at 10:03 pm
If they made it through 2000-2002 ok I wouldnt worry about it much. And if you still have a long time to invest I wouldnt worry about. Just hang on and dollar cost average.
On March 23rd, 2008 at 1:42 am
Your money devalues through inflation on average by about
3 – 4% a year. You usually get 5% in a cash portfolio (interest), which keeps you just above inflation.
If your fund makes less then inflation, you slowly loose your money.
About 90% of all funds are money lossers and I have yet to figure out, how the existence of funds is justified.
On March 25th, 2008 at 4:38 am
i agree with bosai, mutual funds suck!!!!