A reader recently read through a proxy statement for the Gateway fund and decided it was time for a change. The fund, which he owned in...

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A reader recently read through a proxy statement for the Gateway fund and decided it was time for a change.

The fund, which he owned in an individual retirement account, was part of a corporate merger. “They are adding a 5.75 percent front-end load for new investors,” he said. “Fees will be raised after two years. Although the fund management will remain, I am not sure that their hearts are in it.”

And so, the 53-year-old investor went looking around for a replacement, settled on Oakmark Equity & Income, and then pulled the trigger on the sale.

“And wouldn’t you know it, they sold my shares on Jan. 22, so I missed the next day’s big gain of 300 points on the Dow,” he said. “So, I thought that I made a smart move, but it turned out to be a stupid move.”

Not quite.

He upgraded to a fund that most analysts would say is better. It has a better track record, better ratings and lower costs.

But he did fall victim to “out-of-market risk,” the chance of missing out on a big gain while making a routine transfer of funds.

Investors can minimize the risk by making the process as quick as possible, but they should also follow the advice of behavioral-finance researchers, who say the best way to deal with missing random market days while improving a portfolio is to: “Get over it.”

The reader’s IRA money was out of the market for a day when Gateway (GATEX) gained 1.66 percent — and the Oakmark fund (OAKBX) was up 0.35 percent.

While those gains would have been nice, it’s not like’s he’ll reach early-retirement age and come to the conclusion that he can’t call it quits because of that one missed day.

What’s more, if his transaction had been processed six days earlier, he would have missed a 1.74 percent decline in Gateway, or a 1.4 percent loss in Oakmark Equity & Income.

That would not have made his move smart; his portfolio upgrade was wise based on its own merits, not on daily price changes.

Out-of-market risk is unavoidable in mutual-fund transfers. Unlike a stock or an exchange-traded fund, a mutual fund does not trade minute-by-minute and is priced only at the end of the trading day. Processing lags — where transactions take days to complete — are annoying but don’t add to out-of-market days; the money stays invested until the transaction is authorized.

“This is a really tough time to make even a simple transfer, because there is so much volatility that with every passing day, that it can be hard to think rationally and strategically about your financial plan,” says Donald MacGregor of MacGregor-Bates, a Eugene, Ore., firm that researches judgment and decision-making.

“Focus on your long-term strategy and doing what’s right; sooner or later, you’ll have to pull money out, and the time will be right because you say it’s the right move, not because of what the market does on that day.”

Chuck Jaffe is senior columnist at MarketWatch. He can be reached at cjaffe@marketwatch.com or Box 70, Cohasset, MA 02025-0070.