Q. About 5 years ago so many of our friends were making money in the stock market my husband and I decided to try investing. We took $74,000 from the sale of our home when we moved to be closer to my job and invested with Edward Jones. The financial advisor suggested we split the money between 3 mutual funds: Capital World Growth & Income, American Capital Income Builder, and Income Fund of America. We bought A shares and paid $2,583 upfront. The funds paid dividends, which we reinvested.

But the funds have never made back the money we paid to get into them. At one point, we were down $29,000. Now we have made some of the money back, but we're still down $14,500. My husband wants to close the accounts and take our losses. Most people say to keep the money in. It will come back, they say. But I'm wondering if that will happen in our lifetime.

My husband is 67 and on Social Security. I'm 63 and still working. I hope to retire in a year. Should we take our losses and close the accounts? Or should we hang in, hoping to make back the money that we lost? What about putting the money back into the house? If we draw the money out now, is there anything you could suggest to invest in? I know that CD's and money markets are not paying anything, but surely there's something safer than the mutual funds. —P.C., by email

A. You aren’t alone. Many people are asking the same question. To me, it seems like a replay of what happened after the 1973-1974 decline. So many people were discouraged about investing that stock mutual funds were in net redemption. More people were redeeming than buying. This went on for years. It didn’t end until the early 1980s. After that long period of misery, however, both equity values and bond values entered what may be the best period in history for investing.

Those who sold missed the opportunity.

The real question here is whether your investments were appropriate for you. So let’s address that. American Funds Capital World Growth and Income is a global equity fund with about a 90 percent equity commitment. American Funds Capital Income Builder is a World Allocation fund with about 65 percent equity. American Funds Income Fund of America is a moderate allocation fund with about 60 percent equity. So it’s pretty likely that the combination is over 70 percent equities. If this was your first, or only, investment as you approached retirement, this may have been more risk than appropriate. But the operative word here is “may.” It’s a subject about which reasonable people may differ.

Going to 100 percent low yield CDs may save you from losses, but it will also keep you from earning any return on your money. So a better alternative is to reduce you level of risk. One easy fix would be to exchange your Capital World Growth and Income shares to reinvest in Income Fund of America shares. This would reduce your equity risk at no cost to you. The realized capital loss can be used to offset income from the funds, saving you some income tax.

Q. I am 27 years old and a little lost. I recently purchased my first home and have 20 percent equity in it. I also have $17,000 sitting in a checking account at a credit union which is currently earning 3.5 percent. I have no stocks or mutual funds because I would rather see my money gain 3.5 percent than disappear. I have enough in savings to sustain a lay-off. I feel all extra income should be invested, but I don't know where. What do I do now? — D.T., by email

A. With basic security covered, you can participate in your employer’s 401(k) if one is offered and has low costs. If you have one, the employer match may cover any loss you would have on your own money. If not, start your own IRA. Either way, commit to a diversified balanced portfolio. Investing through exchange traded funds with Fidelity, Schwab or Vanguard is now very inexpensive and easy. And you can learn more by reading about the Couch Potato Building Block portfolios on my website, www.assetbuilder.com.