Sold Off All My Mutual Funds

Two days ago, I finally decided to sell off all my mutual fund holdings. The decision was made after a few days of internal struggling and I decided that it is not worth keeping the funds emotionally. I still do not know the deal prices that the funds will get sold at, but I would guess that my overall portfolio approximately appreciated 20% over this 5 months. It is not a great deal, considering how the global economy has bloomed in the recent years. However, my portfolio is pretty diversified and I think it is actually quite a low-risk portfolio, although individual funds stand in the medium to high-risk category.

With all that said, let’s go back to my rationale for letting go of all my mutual fund holdings.

1. Saw a headline stating that Al Qaeda is at its strongest since Sep 11.
2. China’s government seems likely to implement further measures to curb expansion.
3. Extremely high growth in Stock Prices for the recent few years.
4. Increased volatility.
5. Reminds me of dotcom bust.
6. I don’t like what I see in the charts for most markets.
7. Property prices are also starting to get insane.
8. People are starting to think that investing is easy money.

These are some of my main reasons. To sum them up, I feel that a lot of savings have already gone into investments, including the savings of people who have never invested before. Therefore, when people start to sell, there may not be as many bargain hunters to pull the markets up as we see in previous corrections, since most of our savings are already invested in either stocks or properties. Also, I feel that people do not seem to react to negative news nowadays, which I think is a sign of complacence. 

I believe that the next correction will likely be a big one, since there may be a lack of new capital going into the markets. Therefore, it is possible that the market will fall on its own weight. People who may want to move into the markets at a bargain price may be unable to do so as they struggle with their property installment payments. This is especially true if the economy does not perform as well as expected and the effects will definitely come out much stronger. Each inter-related event may cause the lack of funds entering and the acceleration of money coming out of the markets.

I can’t really sum everything up in a post without being confusing, but all in all, I will just say that I am worried that there will be an impending major correction or even a recession. Of course, I may be wrong and even if I am right, the timing may not be so soon. Regardless, I’m not feeling comfortable and I have no intentions to time the market exactly and that’s why I’m getting out. Let’s see how everything goes.