Clueless and Losing Money

Ok, I am about 22 and am clueless about the stockmarket. I just recently found out which things I'm invested in, and they are all mutual funds. It is a pretty significant amount of money, and I have recently lost over 25% of its former worth. Should I be diversifying? I have no clue...My father had been using a Merryl Lynch guy who sends us monthly updates, but doesn't advise us (as in, sell now). I don't know if I should ride it out, get one of the guys that calls you everyday with tips or what. It is a nest egg, however and is worth protecting. Any advice you can give me is appreciated as I truly know very little. Here are some of the Mutuals: Alger Balanced Portfolio Class B (ALGBX), Alliance Growth Fund Class A (AGRFX), Davis NY Venture (NYVBX), Dreyfus Premier Tech. Growth (DTGBX--a real killer), Oppenheimer Quest Balanced Value Fund (OGRCX), and Pimco Growth Fund Class C (PGWCX). Any advice appreciated......


Newbie

1. Although most mutual fund managers aren't very good,

at this point they know more than you.

So, keep your funds.


2. When anyone calls you with an investment idea

and, if you don't understand it in 30 seconds, then

let someone else take advantage of the opportunity.


3. Whenever you feel you have too much money,

send it to the Bahamas or some other off shore spot.

"big money in mutual funds is made by sitting thru several business cycles...to reap large returns from funds, you have to have the strong belief and and patience to sit tight for 10 or 15 years or longer..." (1)


hold your funds and forget about them, your nest egg will be truly phenomenal in 30 years if you don't mess with it now...this is quite a different strategy of holding an individual stock, where you want to sell immediately for a small loss if the stock starts to move against you


(1)How to make money in stocks, by William O'neil


if you want to start learning about the market, start reading Investors Business Daily for rock solid advice... best wishes

do yourself a favor and and research your funds.


go to and go to


www.morningstar.com


or


http://www.morningstar.com/Cover/Funds.html


second link avoids all the pop up windows crap. try to learn about markets but experience needed as teacher. ill stick by my posts here. stay out of tech especially and sell those doggy do losin money tech funds. i would think any portfolio needs some bonds. lots of good bond funds. i like treasuries right now and it looks like theyre goin to have a good rally today.

Bonds at 22? Are you kidding? Stay out of bonds unless you plan on spending this money before you are 40. Bonds might have been a good hedge in the past, but buying in now at record low rates and with the change in relationship between bonds/stocks I would highly advise just staying on course. That is a pretty nice set of funds, very balanced among value and growth. There are times you want one or the other, but if this is truly just a long-term nest egg to be used in your 50s or 60s you should do just fine with it and would be better off ignoring the returns over any short period of time.

im sticking to my guns about a big decline in the market. why take a big hit if you dont have to? of course i could be wrong but i cant tell him to do sumthin different than what im doin. interests rates are low but its clear the inflation boogy man aint rearing his ugly head at this point. if anything we are in a deflationary environment. treasuries are safe and have been rallying. ive been more than happy to be there. stay at the short end. market timing has lots of risks i fully acknowledge but i cant tell him sumthin that i think is wrong.


to newbie,


if you can find a good money manager with a good track record that u can trust that would be a good way to go. when you buy mutual funds youre payin someone to manage your money anyway. so you gotta research the managers as well as what the fund is investin in. billy, erin, and hillbilly have good pts.

If you have a good feel for it then by all means move your money. However, he clearly doesn't have a good feel for the market and these are the people I always tell stay in the market and never time it. If he starts now timing it he may never get into consistent investing...

hey youre right i cant argue with what youre sayin. i could be way wrong about my market view. it should be interestin the rest of the year.

The market is very low now, it rarely drops so much for so long, IMHO it has better chance of rising in the long run. Since you have already lost 25%, you might regret it if you sell.

And since you are clueless, it is advisable to keep your money in the mutual fund until you can learn about risk of different sized companies, diversification, etc.


If you don't intend to use the money in the short run, leave it in, if you need it soon take it out.

The message posters here are as bad or worse than the posters on the small stakes forum. When I get back home (I'm visiting my parents now) I'll post a follow-up with a list of some books you should read before investing in any stocks, bonds, or mutual funds. I'll do this in 2 days.