I’ll be running an occasional series of financial Q&As. These are curated questions I’ve answered in other financial forums. I may edit for clarity and change details to preserve privacy. Remember, I am not a financial professional so this is for your entertainment only. If you’d like to as a question, please reach out to me through this blog.
Q: Backstory – we just sold our home at a $600K loss – that was part of our retirement savings. Big UGH, but it’s over and done with and time to move on. Hubby is onboard with maxing out our retirement accounts, and we want to invest in some mutual funds. Looking for any fund recs – hoping to outperform the S&P and see some growth to close the gap we now have (thinking large cap, growth/income). I have been researching but there are sooooooo many options and they don’t seem to have an easy way to figure it out
Thanks for the help!
A: First, the loss you took on the house totally sucks. I’m sorry about that. I understand how that leads to a need to Do Something Now to try to recover. Note though that this is the same behavior that pushes gamblers back into the casinos after losing because they want to win back their losses. You know that doesn’t turn out well.
It might be good to take a moment to reflect on the house loss and grieve. We don’t know your circumstances, so maybe there is a lesson there for you or maybe it was just shitty lucky. The one thing we can say is you have learned that it is risky to tie up a lot of your net worth in a single asset, whether that be a single house, stock in a single company, Bitcoin, or Beanie Babies. 
Next, you need to understand what you can and can’t control when it comes to investing in the stock and bond markets.
You can’t control what the markets will do in the future, whether they will perform spectacularly or dump or go nowhere. You aren’t going to get around this by trying to pick the best stock fund, so don’t try.
What you can control is: diversification, fees, and how much you save. Diversification is how you reduce your risk of loss of a single company’s stock sucking by buying lots of stocks. The best thing to do is buy All The Stocks through a Total Stock Market Index Fund. You can further diversify by buying a Total International Stock Market Index Fund.
Secondly you can control fees. Over time investing fees add up to a ton of lost money for you, so make sure you keep them as low as possible. Vanguard funds are excellent for this. American Funds are notoriously poor for fees.
Finally, you can control how much you save for retirement. Obviously the more you save the more you will have, but the double goodness of that is the less you spend, the less you need for retirement. So focus on that because you can make big strides towards your goals by controlling that.
Again, best of luck to you and sorry you are going through this disappointment. You can totally recover.
The Best Is Yet To Come 