Wednesday, March 17, 2010

Selling Your Investments Can be Scary

Common Sense on Mutual Funds: Fully Updated 10th Anniversary EditionThere! I did it!  I finally sold my very first mutual fund. Not the first one I have ever sold, but the the first mutual fund I ever bought into. In an effort to curb expenses and to invest into a more diversified portfolio I had to come up with the courage to sell my first mutual fund. Way back, a long time ago, in a galaxy far, far away... at least it seems that way sometimes...I was just a sixth grader and learning about the stock market for the first time in a stock market club. Me and two other classmates named our group the "Brilliant Billionaires."  Honestly, I am not too sure that we were very brilliant, and our $100,000 starting portfolio never even came close to the elusive billion dollar mark. If it had - I'd probably be busy on Wall Street right now, not working from a cubicle!

But hey, Fidelity's Growth and Income fund, FGRIX, was a great first fund for me to own. Was it? Or did I just have this emotional attachment because those quarterly statements have been taking up space for too many years. It wasn't until the last few years when I learned what expense ratios, ETF's, and trading was all about before I had the guts to do something different. Why rock the boat? If it isn't broke, why fix it?

What if the path you have been following is not the most optimal? That is okay, as long as you have the perseverance to stay the course, inefficiency will just make the journey a little longer. I opened my own brokerage account at TradeKing and learned the basics of trading stocks and options. I read up on asset allocation strategies and investing for retirement.

With every new piece of knowledge came the realization that my current path needed to change. My little old mutual fund needed to move on. I finally settled on Fidelity to host my Roth IRA. This decision was partly influenced by my history with Fidelity and with Fidelity's recent offering of 25 iShares ETF's that trade for free.

While I have read about rebalancing to match your target asset allocation - I found that in practice you actually have to act. Good books, numbers, and friends can give you a warm, fuzzy feeling about the path you should take, but until you step down that path - You are NOT making progress. Feeling good was not enough. It takes feeling scared and just doing it to make the progress towards your goals.

What is holding you back from taking that first step? Share what helped you overcome that and get you started on making progress towards your goals.

You may also be interested in reading:
You Can Lose Money Selling Your Investments
Selling Your Investments Means You Get to Buy New Ones
ETF's and Lazy Portfolios
Dollar Cost Averaging: An In Depth Investigation Using EEM
Alternatives to My Investing Decisions

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