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I have a mutual fund (within an IRA) that hasn’t been doing very well. And by not doing very well, I mean it’s doing worse in comparison to similar funds. Despite that, I wasn’t panicking. I just had in mind that I would transfer it to a less-risky fund it when it came up a bit, which it seemed to be doing. So I began looking into what it would take to transfer it to some different funds.

Now this is an old account, that I had gotten back when I had no idea at all what I was doing. I’d bought it through a financial planner. So I contacted that planner to ask about putting part of it into some different funds instead. They didn’t want to do that, and suggested I transfer it to a brokerage house instead. So I sat on it awhile, trying to figure out how to do that, and which broker to transfer it to. And the fund proceeded to lose almost 3% of its value while I fiddled around. Irritating? Yes. A good lesson? Yes.

What have I learned?

First, don’t invest in something that you don’t understand. While I did understand the concept of an IRA when I bought the fund, I didn’t really know what made a good fund. I didn’t know anything about risk, which is kind of important. I’m still not an expert at mutual funds by any means, but at least I now have a better idea of what to look for. I also didn’t know anything about diversification, so all of my money was in one fund. Bad idea.

Second, I learned that you shouldn’t invest with someone unless you fully understand their role. It’s also good to look into their qualifications, level of experience, and to evaluate their performance from time to time.

Finally, I learned that I am very easily frustrated when it comes to not being able to do what I want to do. (Ok, so I knew that part already.) But what I realized is that those feelings were getting in the way of me making a rational decision. So I took a step back and thought more about what my original plan was, pre-frustration.

I also reminded myself that at least I have a better idea of both what to avoid and what to look for in the future.

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