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Emerging Market fund question...

mikes425
edited January 2014 in Fund Discussions
Hi, looking at the EM exposure i have in my Portfolio,
I've been in AEMGX - Acadian Emerging Mkt fund for awhile and it's return for me to-date is: -6%
while my IRA holding of EMB is presently at -8.3%

These are intended as holdings for diversification and my overall allocation is long-term.
Should i be worried about these funds NAV going dramatically further down this year and if so
better off shifting to another sector of funds?

Thanks,

Mike

Comments

  • scott
    It becomes whether you want to play timing or have a long-term view. There are people who are into timing, and if you can do that well, then by all means. Personally, if anything, I would regard further EM selling as a buying opportunity. But, again, everyone's different - has different needs, risk tolerance, views, etc.
  • cman
    An asset class like EM can go down 20% or much more at any time. No one can guarantee it will not. If you did not understand the potential drawdown of a sector you picked to invest, why did you pick EM funds in the first place?

    It would appear that like most people, you may not have judged your own risk tolerance correctly.

    The answer to your question of whether to exit or invest more depends on what your portfolio is like. Is EM 1% of your total portfolio or 80%? It makes a difference. Go to wealthfront.com and run through their questionnaire and see how much EM exposure they suggest for the risk tolerance that you honestly select. How does your current allocation differ from that?
  • scott
    edited January 2014
    Reply to @cman: "If you did not understand the potential drawdown of a sector you picked to invest"

    I think that's like anything, though. I'm not saying this towards the OP, but you have a fund that you're upset with because it's too conservative, you dump that and then it starts performing. EM sucks, you dump that and then problems get swept under the rug and EM takes off. Or maybe not.

    My view is this: everyone is different. Everyone has different needs, different views, different likes, different risk tolerance, etc etc. You have to really realize who you are, your level of risk tolerance and your desired participation level. Do you want to sit there and try to time exits and entrances into funds? Or do you want to have a long-term view and not have to sit there worrying about every significant news story.

    Yeah, days like today (well, and yesterday) suck, but I personally find stepping back and not being so micromanage-y based on the day-to-day makes the whole experience of investing less stressful and more enjoyable.

    If someone can sit there and follow technicals and trends and move in and out of markets with skill on a short/very short term basis, then more power to you. I just find it exhausting and rather futile, given the nature of world markets today.

    I'm not saying be like Buffett (whose favorite holding period he has said is "forever") necessarily, but I just think the average person trying to sit there and move based upon every mini-crisis is just going to wind up frustrated.

    Again, just my opinion.
  • mikes425
    edited January 2014
    Hey Scott and Cman - it's all about the percentage of the mix and in this case, these pure EM positions constitute only 5% total. I simply had the bad timing to see the indexes by sheer happenstance
  • hank
    edited January 2014
    EMs (stock and bond) tend to be quite volatile and are prone to very large swings every so many years. A little bit goes a long way and I've avoided them in recent years. That said, today I started a small position in PRELX which lost 12% over the past year and is probably getting whacked today. Unlike many EM funds, this one is unhedged and reacts more to currency fluctuations. (I'd love for it to drop further over the next few months and would add to.) This is a play on potential dollar weakness in the next few years. I could certainly be wrong in this speculative move. Can't really give you any advice other than I think this sector has been beaten up pretty badly and may be due for a modest rebound by year's end. Good luck.
  • David_Snowball
    For what interest it holds, I celebrated today's carnage by adding GPEOX to my Roth IRA and adding to SFGIX. I'm bad at timing but decent at moving toward the sound of cannons.

    David
  • TedTed
    Reply to @David_Snowball: I love cannons, but not the funds !
    Regards,
    Ted
  • rmt
    Reply to @scott: "Personally, if anything, I would regard further EM selling as a buying opportunity"

    FWIW,i agree with Scott.Have not added to EM for more than 2 years and plan to do so if there is a good sale.
  • cman
    Reply to @David_Snowball: Whether that is good or bad depends on from which side you approach the cannons.:-)
  • David_Snowball
    Reply to @cman: What does the phrase "hey! You tokkin' to me?" suggest?
  • MarkM
    Reply to @cman: A teaching moment. I fear there will be a lot of these.
  • mikes425
    edited January 2014
    Reply to @MarkM: No need to worry Mark, I'm not dumb, just need to keep Emotion out of the equation - and keep it to myself.
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