I invested a certain amount in an MMF in Cowrywise. And today it has dropped drastically to loss of #5000. Honestly, the plan is for growth; then why the reduction? Please, is it advisable to remove it asap
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I invested a certain amount in an MMF in Cowrywise. And today it has dropped drastically to loss of #5000. Honestly, the plan is for growth; then why the reduction? Please, is it advisable to remove it asap
Mama Ngozi: Ah, my dear, let me explain why your Mutual Money Fund (MMF) doesn't yield interest and why it dropped by ₦5000.You see, investing in an MMF is like planting a seed in your farm. You hope it will grow into a big, healthy tree. But sometimes, just like farming, the weather can be unpredicRead more
Mama Ngozi: Ah, my dear, let me explain why your Mutual Money Fund (MMF) doesn’t yield interest and why it dropped by ₦5000.
You see, investing in an MMF is like planting a seed in your farm. You hope it will grow into a big, healthy tree. But sometimes, just like farming, the weather can be unpredictable. In the case of your MMF, the value can go up and down, just like crops can flourish or struggle depending on the weather.
Now, MMFs pool money from different people like a group contribution in the village meeting. This money is then invested in short-term, safe instruments like Treasury Bills – kinda like lending money to the government, which is considered low risk but doesn’t yield high interest. So, the growth in an MMF doesn’t come mainly from interest but from the underlying investments.
When there are changes in the economy or market conditions, just like sudden rain can affect your crops, the value of your MMF can also drop. It’s part of the cycle of investing. Removing your investment in a panic when the value drops may not be the best move. It’s like uprooting your crops because of a sudden heavy rain. It’s important to stay calm and think long-term.
If you need the money urgently or if your goals have changed, then it might be wise to reconsider. Otherwise, try to understand the reasons behind the drop. Remember, investing is a journey with ups and downs, just like farming. Patience and a long-term view are key.
Remember, dear, investing is like farming. It requires patience, resilience, and a long-term perspective. Don’t let a sudden drop discourage you. Just like in farming, a steady hand and a watchful eye will help you weather the storms and reap the rewards in due time.
See lessYes, a Money Market Fund can sometimes show a temporary decline, although it is generally considered a lower-risk investment compared with stocks. The first thing I would do is not panic and withdraw immediately. For example, imagine you invested ₦500,000 in a money market fund. You later check andRead more
Yes, a Money Market Fund can sometimes show a temporary decline, although it is generally considered a lower-risk investment compared with stocks.
The first thing I would do is not panic and withdraw immediately.
For example, imagine you invested ₦500,000 in a money market fund. You later check and see ₦495,000, showing a ₦5,000 loss.
That can happen because the fund invests in instruments such as Treasury Bills, commercial papers, fixed deposits and other short-term securities. The value of the underlying investments can fluctuate, and the fund’s valuation can also change from day to day.
Also, don’t confuse a temporary change in the displayed value with permanently losing your money.
However, I wouldn’t simply assume that every ₦5,000 drop is normal. I would first check:
• Which specific Cowrywise MMF you invested in
• The fund’s recent performance and valuation
• Whether the ₦5,000 is an actual loss or a temporary NAV/pricing movement
• Any fees or charges affecting the displayed balance
• The fund’s fact sheet and risk level
• Whether the fund manager has reported any unusual issue
For example, if I invested ₦500,000 for a 2–3 year growth goal, I wouldn’t withdraw simply because I saw ₦495,000 one day. I would look at the fund’s performance over a longer period and understand why the value changed.
But if I needed the money next month for rent, school fees or an emergency, I would reconsider whether a particular investment is appropriate for that short-term goal.
So my answer would be:
Don’t withdraw simply because you saw a ₦5,000 temporary decline. First find out exactly why it happened.
And remember, “low risk” does not mean “no risk.” Before making a withdrawal decision, check the fund’s latest report or contact Cowrywise/fund manager and ask them specifically why your account value fell by ₦5,000.
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