I would get out and put my money into an index fund or ETF for the broad market. Personally I would rather own the whole market than just what one management team thinks I should own.

But this isn’t professional advice. Do what you want.

If you sell now you are locking in a loss, but you can write off at least $3,000 of that loss this year on your taxes. Not much consolation if you’ve lost that much, but you can then turn around and invest in the index so when it goes back up, you get to have the gain.

@Ravinsu: I read the background on the guy and he has been a great investor, don’t get me wrong. But I stick by the fact that this is a good example of chasing returns. If you chased returns when you saw 70% annual gains for CGM, you’ve been sorely disappointed. I’m not saying he’s a bad guy at all. But it makes a good example. And if you had index funds, you wouldn’t have to worry about it. (I will grant that I would much rather have 70% annual returns than index funds, but not until someone can show me it will be consistent into the future. “Past performance is not indicative of future results” is the saying, no?)

@Start-Up: Yup! Exactly.

@Paige: Thanks for commenting.

You have a point here though about getting into CGM focus well after an unusally phenomenal year for Ken after the commodity bull run. But his returns are way off the peak, so instead of blasting his returns, NOW would be a good time to get into this fund rather than running to Bogle crying foul.

Heebner’s investments were affected more by the sell off in commodities b/c he was (and still is) heavy into the commodity sector. Stocks like Petrobras, US Steel, were heavy overweights. He’s known for having a down year, so it’s not surprising to see him fall off the mark this year after blowing everyone away for the last 5.

One thing I do to avoid situations like this is pull the stock charts like you did here. If you see a huge spike in price in the last 6 months… just avoid buying it. Wait for it to come back down to earth.