Mutual Fund Losses? There is Hope…

New York, NYThe mutual fund losses are staggering. There can be no other word for the plummeting of portfolio values suffered by investors, some of whom are speculators—but most of whom are your average, hard-working everyday American slugging it out to put food on the table and a roof over the head.

And maybe, set aside some money for the day when your working life is over.

Given the never-ending string of bad news that has wafted through the airwaves, or screamed from the headlines during the last year, it comes as no surprise those mutual funds and pension funds have lost big time. But now the people who track such things are able to quantify the horror.

And the news is not pretty. US retirement funds suffered a loss of nearly $1 trillion of their value in the year ended September 30th 2008.

That decline is due largely to disastrous returns from equity markets. According to Nancy K. Webman, editor of Pensions & Investments (P&I), domestic equities, as represented by the Russell 3,000 index, fell 23.1 percent for the year ended September 30th . International equities performed even worse, with the Morgan Stanley Capital International Europe Australasia Far East index returning minus 32.5 percent.

Aggregate assets of the 1,000 largest US retirement plans dropped $965 billion, or 13.1 percent, to $6.4 trillion as of September 30th from the previous year.

And the nightmare continues. Assets of P&I's top 200 funds declined 15.9 percent to $4.7 trillion, also the worst in the past 30 years. Aggregate defined benefit plan assets among the top 200 dropped 16.5 percent to $3.7 trillion, the worst in the 20 years for which P&I has tracked the breakdown between defined benefit and defined contribution plans.

Defined contribution plan assets of the top 200 also declined 13.7 percent, or $164 billion.

The fourth quarter of 2008 made it worse: P&I estimates assets of the plans fell an additional $754 billion, or 11.8 percent. That puts the total loss at $1.7 trillion, or 23.3 percent, for the 15 months ended December 31st.

The results are based on responses to detailed surveys sent to executives at corporate, public and union retirement plans by the publication. Statistics are compiled on defined benefit, as well as defined contribution plans, such as 401(k), at each institution.

It represents the worst loss in the 30 years Pensions & Investments, the international paper of money management, has been tracking the top 1,000 pension plans.

So what does a pensioner do? How does an individual who has been investing for retirement with the best of intentions, respond to such a crisis? And a crisis it could well be for you, as with time slipping away you have little opportunity to make up the shortfall.

Thankfully, a good mutual funds losses lawyer may be able to help you. The key is not the state of the market—which has affected everybody—but the role a funds manager, or a broker may have played in those losses. It is no secret that some funds managers, and mutual funds brokers have ignored the express wishes of their clients with regard to risk tolerance, and other factors that may have played a role in the loss of portfolio value. Brokers, and funds managers are required to disclose risks, and are mandated to invest with your best interests at heart, not theirs'.

Too many brokers and funds managers have thumbed their noses at those rules to which they are morally, and legally bound. If that's the case, you may have a case of your own and a chance to recover some, or all of your losses.