Yes, there are times when you should head for the exit. If done smartly, selling can even boost returns. A perfect strategy for a perfect world. But the world of investing is far from perfect.
Markets change, portfolio managers come and go, and investors' needs evolve.
Any of these factors can provide a reason to sell a mutual fund. Unfortunately, many investors base sell decisions less on logic and more on the emotions of the market. For example, when the market took a fast nose dive last year, redemptions from equity funds soared, then prices promptly rebounded. This story will give you some good ideas on when to consider getting out of a fund. Be aware, however, that there are no absolute rules.