Putting mutual funds “on hold”

Question: Is there a way we can put our mutual funds on hold without withdrawing them from the fund company? At times like these, we seem to be losing more than we are gaining. My brother-in-law said he can call his mutual fund advisor and they hold the fund or put the fund in a holding pattern (I’m guessing that’s what he’s talking about) so it doesn’t take such a big hit by the market. – Betty


Send us the name of your brother-in-law’s advisor. If he can really do that, lots of people will want to talk to him!

Seriously, there is no such thing as putting a fund “on hold”. The assets in most fund portfolios are valued daily (a few are done weekly or monthly) and a new net asset value (NAV) is determined. There is no mechanism to freeze the assets within a fund.

Perhaps your brother-in-law’s advisor has simply moved a large portion of his assets into a money market fund. This can be done without withdrawing the cash from the fund company, however it does trigger a taxable capital gain or loss if the funds are held outside a registered plan.

It sounds to me as though you may have too much of your money invested in equityunds and are experiencing undue stress as a result. Perhaps you should consider a more balanced approach to your investments. You might want to set up your own meeting with your brother-in-law’s advisor. You may also wish to subscribe to our Mutual Funds Update newsletter, which offers guidance on how to create a well-balanced portfolio. The April issue features a major story on this subject. If you would like subscription information, you will find it at http://www.buildingwealth.ca/promotion/50plusproducts.htm

I hope this helps. – G.P.