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When to Fire Your Fund Manager

CNBC – Given the troubles in the market, we’re all worried about losing a chunk of our savings, whether it’s wrapped up in mutual funds, hedge funds or individual stocks. But how do you know when to bail on your fund (or fund manager) instead of just sticking out the volatility? Carmen offered some guidelines on Wednesday for distressed investors wondering when’s the right time to get out.

If you’re invested in a mutual fund, you’re probably seeing losses across the board. It’s important to look at the fund relative to other benchmarks, though, not just how it is performing against the Dow Industrials. If your fund has lost 10% or more relative to rival funds, Carmen suggested it might be time to pull the plug.

For hedge funds, be aware that it takes more time to redeem your investments. Do a gut check, Carmen said. If you feel uneasy about how your money is performing, that’s a sign. Trust your instincts as well as the overall performance of the fund.

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