Hopscotch Can Be Costly When It Comes to Mutual Funds

Amid seasick markets and ongoing threats of terrorist attacks, skittish investors may be more inclined than ever to sell their mutual funds. In certain cases, such selling is warranted, financial planners say. But a new report out from Financial Research Corp. shows just how much investors stand to lose by trading their fund holdings.

In the most relevant finding for investors, the firm tried to assign a rough dollar figure to how much those who traded would have lost over time.

Over a 25-year period, the firm estimates that the average investor's $10,000 investment in mutual funds would have grown to $123,000 without any trading, but only $70,000 with trading. The $53,000 difference comes from bad timing. ...