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Yes,when I had my portfolio with merryl lynch I never did anything myself,the stocks I had were orriginally purchased and I just kept them ... I never bought or traded with any of it,I didnt think you had too and with mutual funds especially am I wrong,isnt that how mutual funds work,they invest in certain companies and when the stock goes up and you make money, doesnt it just make the worth more?I didnt think you had to do any buying or trading I thought that was the whole point of mutual funds,amI wrong?
Michele, in practice you are wrong. Whether you own individual stocks or mutual funds which hold a basket of stocks within their fund, when the stocks go up your holdings increase in value and when stocks go down your holdings lose value. The fact that you own a mutual fund instead of individual stocks only "diversifies" your potential gains and losses. If the stock market has a down day, probably 95% of the stocks held by the mutual fund go down and you therefore lose money.