Funds Intermediate: When to Sell a Fund

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1.
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.
2.
If you began investing for retirement and now your goal is to buy a home in two years, _______.
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You may need to sell some of your aggressive funds. If your goals change, your portfolio should, too. Since you're now planning for a shorter-term goal, you may need to sell some of your aggressive funds and become more conservative.
3.
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.
4.
If your fund is an underperformer, you should consider all but which of the following before selling it?
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Check its one-year performance. You may want to give the fund more than one year before selling due to underperformance.
5.
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.