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Occasional Contributor

I am 79 years old.  USAA  opened a conservative mutual fund portfolio for me.   I didn't expect it to make much money but was led to believe  it would be pretty safe.  I figured the worst scenerio would be breaking even.  Instead my portfolio lost $900 in less than 6 months.  I bailed out with a big loss.  A bummer of an experience.

6 REPLIES

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I think this goes to illustrate the importance of understanding your own risk tolerance. If you can't handle seeing an investment go up and down with the market fluctuations then you really should not be in the market, though of course that leaves you open to the very real risks of losing money due to inflation. Next time I challenge you to either not look so closely at your investments since they do go up and down (that is the nature of the beast) or do whatever it takes to not panic and sell at a loss. Remember: you only lose money when you sell when the market is low. If you haven't sold then you haven't lost money and you can simply wait for it to go back up again. Since our ages are so different we clearly have different investment profiles and risk tolerances, but I think it goes for everyone that you should never panic and sell when the market is going down because that is the only guaranteed way of losing money.
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Hi ysette9,

Appreciate your comments. However, investing decisions are not black and white. For young people ,and under ideal conditions, your suggestions would work fine. Us old folk don't have the time to play the waiting game with a sour investment, hoping it will recover (we don't even read thick books or buy green bananas).   My contention is, if you are in a bad investment, unload it and reinvest in something better. I was in a poor investment and bailed out.

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For anyone else reading along, six months seems like a short timeframe for an investment.  Especially for a mutual fund.  And depending on how much is invested, being down 900 on an investment is pretty easy to accomplish.  If you bought 100 shares of SPY on July 24th this year, by August 7th you'd have been down about 900 bucks.  By Oct 15th things were much worse, and you'd have been down about 1800 on paper.  Ouch.

 

The thing is, as investments go, SPY is pretty conservative do to its built-in diversification.  Still it has been a bad three months.  But where will it be in a year or more?

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Well stated, Chris. Things could always be worse and often are for those who wait. I cringe when a broker tells me it's too low to sell or it's not a loss until you trigger the sale.

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At age 79 do not let anyone talk you into equities/mutual funds, bonds, annuity, unless you are very comfortable and knowledgeable about investing. The standard sales line is "you need a balanced portfolio". No, YOU need protected cash. The truth is there comes a time or an age when you need no risk whatsoever. What many brokers should realize is the biggest gain an elderly or aged person has is simply waking-up to another day...without fretting over the markets.
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Hi robdhubb,

That's telling it like it is.  You should apply for a position as a Fund Salesperson at USAA.  They need you.