So, why is my Emerging Markets fund tanking compared to other holdings?

leahciM

StevieJ wrote: »

could be an inflection point of EM's.

What's an inflection point please?

masonic

leahciM wrote: »

What's an inflection point please?

It's the point on a curve where, in this case, it goes from falling to rising.

edinburgher

Mubarak steps down, could be an inflection point of EM's.

Let's hope so. Since my original post, there's been a further 9%? drop in the value of the fund Despite being honest enough to admit to being influenced by trend investing when I first picked this fund, I think there are a lot of positives to investing in emerging middle income economies with growing middle classes and changing demographics. With 30? years to retirement I think I can afford to hold onto it for a few more years and see what happens!

Now, to try and find myself a European fund for 2011-12...

DavidHayton

edinburgher wrote: »

I think there are a lot of positives to investing in emerging middle income economies with growing middle classes and changing demographics. With 30? years to retirement I think I can afford to hold onto it for a few more years and see what happens!

Now, to try and find myself a European fund for 2011-12...

Hi Edinburgher,
I agree with you about the long term outlook for Emerging Markets. Which is why I am keeping 10% of my portfolio in them. However they will go up and down - "as it says on the tin". And, with EMs, the potential rewards are only there because they are likely to go up and down quite a lot. Otherwise they would already be more expensive.

My philosophy is that after something has gone down it may well be time to buy more (after conducting the necessary research, and considering the weighting of that asset in my portfolio).

Best wishes
David

mike88

DavidHayton wrote: »

Hi Edinburgher,

My philosophy is that after something has gone down it may well be time to buy more (after conducting the necessary research, and considering the weighting of EMs in my total portfolio).

Best wishes
David

That was my philosophy as well until I hung on to my Emerging Market funds for too long and found myself with losses of 60% over a very short period. That was in the 1990's.

What goes down does tend to rise.........eventually but you might have to wait a very long times for your funds to recover.

Recently I read somewhere that international fund managers are reducing their exposure to emerging markets and diverting their attention to Japan. If Emerging Market shares are being sold by the professionals that suggests EM funds are more likely to fall further than rise in the short term.

masonic

mike88 wrote: »

Recently I read somewhere that international fund managers are reducing their exposure to emerging markets and diverting their attention to Japan. If Emerging Market shares are being sold by the professionals that suggests EM funds are more likely to fall further than rise in the short term.

I would have thought those turning their attention to Japan now have probably missed the boat?

mike88

masonic wrote: »

I would have thought those turning their attention to Japan now have probably missed the boat?

The Nikkei 225 closed at its peak in December 1989......21+ years ago at 38915. It closed on Friday at around 10605.

I was only reporting something I had read ........................I wasn't recommending Japan but on the face of it there is still room for upside although I won't be investing there.

masonic

mike88 wrote: »

The Nikkei 225 closed at its peak in December 1989......21+ years ago at 38915. It closed on Friday at around 10605.

I was only reporting something I had read ........................I wasn't recommending Japan but on the face of it there is still room for upside although I won't be investing there.

I got lured in by the same rumours several years ago. I was grateful for the recent upward movements as an opportunity to get out again.

lvader

Japan has done well for some foreign investors because of the exchange rate. There is some thought that Japanese shares might do well this year, which is good for the Japanese but might not be so good for others if the Yen goes down at the same time.

relaxtwotribes

StevieJ wrote: »

But the very intelligent investor expected at least 10% falls in funds as volatile as EM's and may be in or may be out but if he is out he won't be out because of 10% falls

I accept what you say, but you are taking my post slightly out of context. I mentioned selling when the 2 EM investments had fallen 10% against a backdrop of a 40% rise in a relatively short time frame. That makes a difference.