Thursday I called the Value Line 800 number and told them to exchange all my shares in the Value Line Fund for shares in the Value Line Income and Growth Fund. I had initially invested equal amounts in both with a series of small purchases in 1982-1983. I have been reinvesting all distributions ever since.
The investment in the Value Line Fund was not one of my better calls. Although the value did increase by more than a factor of 5, an annual return of about 6.3%, this considerably lagged the market. The performance in recent years seemed particularly bad. And indeed according to Morningstar (via Quicken ) over the last 5 years 99% of similar mutual funds have performed better. Since I also had a large unrealized capital loss selling seemed indicated.
Perhaps I should have gotten out of the other Value Line fund as well but it had done considerably better. Its value had increased by more than a factor of 12, an annual return of about 9.7%. This still lagged the market (but perhaps with less risk). And according to Morningstar over the last 5 years only 4% of similar funds have done better. Since exchanging just meant a phone call and a complete redemption would have required a signature guarantee my natural laziness and inertia dictated exchanging.
Looking back at the performance of my investments over time it is a bit disconcerting how much luck is involved. Since I tend to take the path of least resistance and let investments ride rather casual initial decisions can have big consequences over time as differences in performance accumulate.
Worthless Pennies - a plea for contact
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