Ask Terry Questions Fidelity Magellian fund — it’s all I have!

Fidelity Magellian fund — it’s all I have!

By Terry Savage on March 01, 2020 | Financial Planning / Retirement

I’m 66 and my IRA is in the fidelity Magellian fund. With the market nose diving this week should o transfer it to a money market? I can’t afford to lose much more or I’ll have to return to work. Please help!!!

Terry Says

OK, this is exactly what I DIDN’T want to happen — people selling stocks and mutual funds in a panic. At 66 you do need long term growth –but you also need LIQUIDITY to give you the confidence to ride out a bear market. On any up day, move 25 percent of your investment to the Fidelity government money market fund. You must give the instructions during the day to get the closing price on that day. Then, you will be able to sleep at night.

This is not the end of America, not the end of future growth around the world. But it is a setback in global growth that will be reflected in a decline in the stock market — a drop that could last for many months, or even years. BUT — at your age, the historic statistics show that you have at least another 20 years to live. And the broad stock market has never had a 20 year losing period (dividends reinvested, as they are in your fund).

But it will be scary and if you panic and sell everything, it’s likely that will happen at the worst time, which is what makes a market “bottom.” So sell some now, and then have the discipline to ride it out in the future. And, although you didn’t ask –it might be a good idea to go back to work now (aren’t you bored being retired so young?) and getting some extra cash while the economy is good!

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