When and how do you move out of a mutual fund?

[disneysteve]

I am sure Disney Steve has a 529 plan for his daughter's college- as the risk profile for the mutual fund changes, the probabilty of changing mutual funds increases. This would be a different risk profile than you have, and different than what I have... If the investment is an age based portfolio, you need to ask yourself if your risk profile matches the one for the fund "right here, right now".

I do have a 529 and it was 100% in an age-based portfolio until a couple of years ago. When the market started heading south, I decided that the age-based fund was more aggressive than I was comfortable with at that point. I left the money I had in that fund but redirected my new contributions to a more conservative fund to gradually ratchet down the overall stock exposure. Basically, as Jim suggests, I felt my risk profile no longer matched the risk profile of the fund I was in.

[isralexba]

I know this question is kind of broad and depends on probably many different factors. But maybe someone could help.

Now the idea with mutual funds is that you are supposed to just let your money sit and ride everything out. But what about the 2008 bear market? Surely, if you were in an S&P index fund, like I currently am in now, you wouldn't have wanted to just let your money sit and ride the market out right? At what point does one decide to take money out? How much do you take out? Do you take money out in smaller chunks over a longer period of time until the market corrects itself? Or do you just take a large lump sum out.

there are 2 options:
1. either you are there for the complete ride (up and down) for a long period (more than 5 years)
2. buy the fund in a fixed amount of money each month - when the market declines you will simply buy more units.

do know of anyone who can time the market

[Andrew Jackson]

Basically, as Jim suggests, I felt my risk profile no longer matched the risk profile of the fund I was in.

Makes sense.

[snafu]

One point that wasn't mentioned is re-balancing your portfolio. This may not be a factor for OP but many of us have targeted funds with long established %. I have a plan and I believe I'm successful because I stick to it