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Hello,
I have money in an investment fund with Credit Suisse which has already gone down 12 percent. Should I pull it out now due to the crisis we are all facing? I was to understand that there are no penalties in doing that. Can someone please share their views.
Thank you,
G. Ibrahim
Geneva
Truth is: nobody knows how the market will evolve the coming months and years.
There is a chance that the market will recover this year already. There is also a probability that this is only the beginning of a bigger crisis due to the Corona virus. There is also a chance that markets will need many years to regain their strengths.
In the long run, up to now, market always recovered. Thus if you have enough time, most experts will advise you to sit it out.
If you need your money soon (say for example next year), pulling out should be an option.
Generally: Investing (new) money right now in equities or funds is a risky idea. If you are afraid of risks, staying with cash (or savings accounts) at the moment is the safest bet.
Thank you for your take on this. I don’t need the money right now but am looking at it from a recovery perspective. I am not a finance or economics person but if we do the simple maths, the losses would be very hard to recover, even with a good spell. I think these are exceptional times and maybe pulling it out would make the best of a bad situation.
If I don’t need it for another 2-3 years, would your advice be to stay put? And if so, at what point would you change your mind?
2-3 years is really difficult to estimate.
In case of a depression, it could be far worse than today. If you want to believe gurus like Marc Faber at least. But there is no certainty at all.
Even a guy like Marc Faber holds around 20% in stocks (other portions in gold and so on). In Faber's words: Everyone will lose, but some investors will lose more than others.
You have to think about your overall asset allocation as well. If the fund is only a small portion of your wealth, never mind. If it's a relevant portion of your assets, you should better be worried.
Hi ggibrahim, did you end up quitting the fund or holding it? If you kept it, how has it recovered so far?
