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If your mutual fund is so volatile that it is giving you excessive stress, you can consider selling it.

True

False

True. Here, you might want to buy a fund that doesn't cause migraines or ulcers.

What is not a good reason to consider selling a fund?

It loses more than it should

It gains more than it should

It performs just as you expect

It performs just as you expect. If a fund loses or gains more than it should, it may be taking on risks that you didn't think it took. It may therefore be an inappropriate investment for you.

If your fund is an underperformer, you should consider all but which of the following before selling it?

See whether the manager has changed

See whether the strategy has changed

Compare it to an appropriate benchmark

Check its one-year performance

Check its one-year performance. You may want to give the fund more than one year before selling due to underperformance.

As your financial goals change throughout life, what should happen with your mutual funds?

They should probably change too

They should stay put

They should be sold off

None of the above

They should probably change too. At the very least, it's a good idea to make sure that they can meet your financial goals.

Before cutting an underperforming fund, check its _______.

One-year return against the market

One-year return against its peers

Three-year return against an appropriate index and its peers

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.