Should you sell your mutual fund when it generates a loss? Not necessarily, here’s why

Should you sell your mutual fund when it generates a loss? Not necessarily, here’s why

Dubai: If you have noticed that your mutual fund consistently generates poor performance over the last two or more years, it may be time to cut your losses and move on. But should you do that if the fund occasionally gives you negative returns or generates a loss? No, here’s why that is. “While investments in mutual funds are beneficial for building wealth over the long term, they are also subject to a variety of risks – one of them being the fund’s returns recurrently going into negative or turn a loss,” said Brody Dunn, investment manager at a UAE-based asset advisory firm. “When investing in mutual funds, deciding to sell your investment based purely on profit and loss could backfire. A better way is to follow a set of rules. You should stay invested for a longer term, unless there is something wrong with the fund or you desperately need liquidity.” There are two instances a mutual fund can perform poorly, experts explain. It could be due to a poor market or the fund manager's poor fund management skills. If your mutual fund is performing poorly because stocks markets have been consistently down, investors should continue to invest. However,