I have a (with Putnam , if that matters). It has steadily declined in value for the past few months. My husband and I were going to use the to rebuild our garage next summer. Should I take out that now and put it into a high-yield savings account rather than letting it sit where it is and potentially loosing most of it?

I know NOTHING about investing//, etc. This was given to me when I was quite young and I have only ever used it twice – as a down payment and to remodel my kitchen. This would a withdrawal of the last of the .

I’ll be calling my investor/advisor tomorrow. Just thought I’d try to get some insight/knowledge before I call…

Thanks for any info you can give me! :-)
I only have about k left, and it has been invested for quite a few years now. Like I said, I don’t know much about it. The company is "Putnam" and it has been pretty steady for the past 15 years. It is a low-risk fund that has not gained very much but is now loosing at an alarming rate.

I won’t put it towards the principle of my house as we will be selling it very soon, although that’s a great suggestions.

 

  • saberhilt 11:58 am on March 5, 2010

    What’s your Mutual Fund invested in? With two big closures over this last weekend, plus damage to Houston and our oil production, this week we’re going to see a sharp increase in gas prices (I predict $.20 per gallon over the next 3 weeks) and stocks will lose most of ground they made last week after Fannie and freddie got taken over by the Fed.

    Now might be a good time to pull them money and invest it in something else. Why put the money into a 4-5% interest account when you can do soooo much more with it.

    Now I’m assuming that this amount is more than 5k.

    Why not take this money and make a large mortgage payment with it directly against your principal? For example, on a 200k mortgage, if you were to pay 5k directly against the principal in the first six months, you’d save nearly 27k in interest over the 30 years (at 6%).

    If you put your mutual money directly against your principal now, how much money might you save in the long run?

    AND, in 9 months when you’re ready to rebuild the garage, you can open a HELOC and pull that money right back out.

    Make sure that the bank knows that this payment is to go directly against the principal though.

    And also, there’s some tax repercussions on selling the funds to be aware of.

  • Christopher P 11:58 am on March 5, 2010

    If you cash in the fund now (while the market is at all time lows), you will be making the same mistake that every typical investor makes. You will be selling low. If you leave it in there, it will once again increase in value with the market recovery.

    Cashing in now is a dumb move. If anything, you should consider putting MORE IN.

    Your fund is behaving NORMALLY in this economy. The market will likely be in a better place by next summer. Even if it isn’t, you may save yourself thousands by using other sources of funds or putting off the project until a later date.

  • bud68 11:58 am on March 5, 2010

    Mutual funds are intended for long-term investing. For a short-term goal like yours, I recommend putting the money into a savings account or money-market fund.

  • MVD34 11:58 am on March 5, 2010

    Yes, sell.