Mutual Funds Investment, is there any possibilities that we can suffering looses instead of gaining profit?

Answer 1

Tinker: A mutual fund is just a pool of stocks (usually) managed by a professional stock picker. Sometimes the fund focuses on one particular industry or stock type (such as small cap or international.) Therefore if the portfolio manager (the stock picker) makes wrong moves, or if the area that the fund focuses on goes south, the value of your investment in the fund will go down too. In the world of mutual funds there is everything from very conservative short term bond funds that won't fluctuate that much (either up or down) to very aggressive funds that can rise and fall just as fast a stock.

Answer 2

You bet your money there is.

Here are just a few examples:

USPIX and RYVNX negative 28% annual return for the last 5 years.

Wouldn't you just love to have owned those?

Forbes lists a total of 39 mutual funds with a negative 5% annual return or less during the last 5 years. Considering that the last 5 years was a bull market more or less, that must take some doing. 90 mutual funds with 0% annual return or less during the last 5 years. I would like to know how many mutual funds have negative returns from the top of the dot com bubble to now. I expect several hundred or more.

Then there is QQQQ, the darling EFT. Annual return since inception: negative 3.44%.

Answer 3

Of course. Mutual funds are just a bunch of stocks grouped together in one fund. If all those companies tanked, you would lose your money.

However the risk is fairly low because there are so many companies in each mutual fund. Most funds don't hold more than say 2% of the fund in one given company. So you are fairly well protected.

However if you bought (hypothetical example) a precious metals fund, and then the precious metals industry when down the tubes, you might get screwed. That's why it is important to diversify and buy funds that cover a few different industries & countries.

Answer 4

As with any investment you can take a loss as well as make a profit with mutual funds. Some are designed to limit your risk but some risk still exist.

If someone guaranteed you a profit I would get my money back as soon as possible and run in the opposite direction.

Answer 5

Yes, depending on what level of risk is in your portfolio. The funds can be high risk, high return or low risk, low return. Many mutual funds contained dot com stocks a few years back and actually lost qiute a bit of money. Over the long term, however, most mutual funds increase in value.

Answer 6

Sorry to all mutual fund dreamers who think your investment is safe and will never take a big loss. This is just one example and shows that your investment is not safe in these crappy funds. There are many other funds that never returned and some consolidated into other funds.
http://finance.yahoo.com/q/bc?s=JAWWX&t=my&l=on&z=m&q=l&c=

So everyone here, quit feeding these people that mutual funds are a great investment.

Answer 7

Rule #1 about investing;

Fully understand the product you're buying (before you buy it).

Every fund should be judged against it peers. Not the overall market.

Answer 8

You can dollar cost average w/ mutual funds in the long run if you are diversified. Fidelity is a good firm. They are consumer friendly.

Answer 9

YOU BET THERE IS. You need to read Arthur Weisenberger's book and read the stuff at www.morningstar.net

Answer 10

possible, but not likely....worst case...you'll just come out slightly ahead....it depends on who you go through, what fund.....and how long you keep it in, but roth ira's are the way to go!