The markets lost about 400 points last Friday. I have been waiting for something to follow Brexit and this was a nice appetizer. But it also nicked me a little. I had been holding on to share of the Vanguard Energy fund Inv. for a month or two. I was pretty sure oil was going to make a comeback at some point even if I had no idea when. When I buy stuff I assume that many times I am going to have to hold on to them for a while if I don’t want to lose money. Anyway the first time I was up by 15% I got a little greedy (bad idea) and didn’t sell. Then I was kicking myself when the price declined. On Friday I decided that I wasn’t going to let this new 15% level get away and put in an order to sell. But darned if the market didn’t slide down about 400 points at the end of the day. So rather than make 15% I made about 11%.
No tears appeared because my goal is to make 10% overall, but 15% would have covered me for anything that falls short. But I left myself open for this by not following my other rule about selling mutual funds. And that is to sell on the second “up” day. The price is set at 4pm ET everyday after the market closes so you don’t know what price you are going to get for sure. But if the market is up and You see a good price, you should get that and maybe a little more if the market is also up for a second day. I should have waited perhaps, but I can’t complain as it turned out. Since the market when down the day I sold I was pretty sure I would not get as much as I expected.
So the reverse is true. If you want to buy a fund try to wait until the market is down and your price is lower. Then buy on the second day when the market is down or mostly unchanged. If you are going to buy a mutual fund there is NO REASON I know of to blindly buy it at random times. I have done that in the past, but you are are throwing money away more likely than not.