Funds Intermediate: When to Sell a Fund

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1.
In a mutual fund, style shift _______.
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Sometimes indicates a change in strategy. Funds can change styles without a strategy change. A manager may buy small-cap stocks, for example, but hold onto them as they grow into large-cap names. Thus, a small-cap fund may shift into a mid-cap fund without a full-blown strategy change.
2.
Before cutting an underperforming fund, check its _______.
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Three-year return against an appropriate index and its peers. Give funds a few years before cutting them loose, and be sure to compare them with appropriate benchmarks.
3.
As your financial goals change throughout life, what should happen with your mutual funds?
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They should probably change too. At the very least, it's a good idea to make sure that they can meet your financial goals.
4.
Why might you want to sell a fund that returns vastly more than you expected it to?
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It may not be the kind of fund you thought it was; for example, it may be taking on lots of risk. If a fund loses or gains more than it should, it may be taking on risks that you didn't think it took. You may want to sell it.
5.
If your mutual fund is so volatile that it is giving you excessive stress, you can consider selling it.
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True. Here, you might want to buy a fund that doesn't cause migraines or ulcers.