Mutual Fund Investors Alert

The cash levels at some mutual funds have soared to as high as 35%. That is because some fund managers have had a difficult time finding bargains in the stock market this year.

Cash positions of 20% or more can hurt performance, although the cash does provide opportunities to snap-up bargains should they appear.

As a self-defense, a mutual fund investor should review his/her funds' latest portfolio reports, and if any has a large cash position (above 20%) but you want to remain fully invested, it would make sense to switch into another fund that has a more reasonable cash balance in its portfolio.

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