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CGM Focus Message Board

  • ryanruiz100 ryanruiz100 Sep 3, 2008 11:50 PM Flag

    For those who invest based on emotion

    http://www.kiplinger.com/columns/fundwatch/archive/2008/fundwatch0102.htm

    Read the entire article, especially the bottom.

    This should clear things up.

    CGM Capital Development: 16.7% annualized 1979-2004, not 80% annualized with no drawdowns and guarantee of never losing money like some of you want.

    Go send your money to the guy who promises "risk free 100% return bonds" in his advertisement if that's what you're looking for.

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • I gave you 5 stars but doubt many folks here will pay attention. They'd rather talk about politics or religion.

      As for me, I have my entire retirement account in CGMFX. The fund has these scary downdrafts, but I trust Ken Heebner will do well again and we will once again make good money.

    • Hey Guys,

      I'm selling risk free 100% return bonds if anyone is interested.

    • Thank you very much, this was very helpful and put me in a much better perspective. I also noticed if you look at the 2002 decline of cgmfx compared to the dow, the last month looks like just a tiny drop, it was something like -45% stretched out over 11 months, ouch. Lot of people probably panicked and left then too. The article said to only have 10-15% of your portfolio as CGMFX. That makes me worry since about 55% of my portfolio is in it, then again, I'm only 24 so my risk tolerance should be much higher than the average investor. What do you guys think?

      • 2 Replies to vestavius
      • vestavius, if it is your retirement fund, and you don't plan on touching it for 40 years, I don't see the harm. That is my opinion though. I have 100% of my IRA (roughly half my retirement savings) in CGMFX and 100% of my 401k (my other half) in Lord Abbet Small Company Value through work. How has this worked out? Pretty good! I also have 100% of my taxable savings in CGMFX and I'm feeling the pain there. However, I look deep down inside myself and understand investing can be emotional. My taxable CGMFX is not just some money I'll need 40 years from now, it's a down payment on a house, a business, a flashy new car, POWER! And if my holding in CGMFX goes down, my power and dreams go down with it. My IRA or 401k, however, is so far in the future that it doesn't affect me.

        It is important to look at long term charts. It's real easy to look at a chart of, say, GE since 1980 and see just how much money you would have made over the years, you'd be rich! But to hold through all the thick and thin, the ups and down over the years, is a totally different story, one little blip in recent history that causes you a lot of turmoil and unhappiness wouldn't even show up in a chart of GE 10 years from now. It's always important to put things in context. Best of luck.

 
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