Do Not Bet On A Broad Emerging Markets Recovery - FT

lvader

bigadaj wrote: »

Yes, so your comment indicated that no one would think of buying an emerging market share whereas samsung is the 20th largest company in the world according to forbes.

They were talking about carefully selecting individual EM stocks, not simply picking the biggest or ones that can daily easily be traded in London or New York.

TCA

gadgetmind wrote: »

JEMI and BRWM is as far as I've got 'cos I'm rammed at work and doing a three countries in four days next week.

I see JEMI is now at a 52-week low, largely just the gains from 2013 eradicated. It's getting tempting but it might drop even further.

BRWM seems to have been on a downward spiral since the end of 2010 since the meteoric rise from the depths of 2008, so that also may keep sliding.

Have you thought about prices you'll buy in at or does it depend first on when you sell your other bits?

gadgetmind

I rarely try to set entry prices as there is no point trying to catch the bottom. I just sell things that look over-valued and buy things that look under-valued.

What's difficult is that it's mostly my infrastructure that looks over-valued and I'd mentally agreed with myself to buy bonds if I sold that!

TCA

gadgetmind wrote: »

I rarely try to set entry prices as there is no point trying to catch the bottom. I just sell things that look over-valued and buy things that look under-valued.

That of course makes sense. I'm buying with cash lump sums and find it impossible to not attempt a modicum of market timing. Can't be bothered drip feeding and too costly for shares anyway. I think both JEMI and BRWM will be good long term investments but can't prevent myself from trying to guess the bottom, especially given the way the graphs are going. Very hard to convince myself of "time in the market" in this situation.

gadgetmind

Both of them will at least reward you with some decent income while you wait for capital gains.

JohnRo

can't prevent myself from trying to guess the bottom

Guilty... I set a few optimistic buy prices today. One of them was 450 set this morning for BRWM today - and just missed out.

The problem is tomorrow I'll be looking for similarly optimistic price reductions and probably miss out again if they even get anywhere near. Then if I do snag a few they'll probably keep falling anyway so it'll feel like a loss even though I reduced the price I was willing to buy at.

I managed to grab merchants for a lower price today but it fell further so hardly feels like a win, I guess that's always going to be the problem unless you somehow hit the bullseye bottom.

It might just boil down to the simple fact you either want them or you don't and if haggling over a few pence then perhaps subconsciously it's not something you really want at this stage.

TCA

gadgetmind wrote: »

Both of them will at least reward you with some decent income while you wait for capital gains.

Yes, this is what I'm trying to convince myself with. But although a 4% dividend is better than the 1.8% gross I'm getting for my cash, it seems miniscule in comparison to the price drops seen of late.

JohnRo wrote: »

It might just boil down to the simple fact you either want them or you don't and if haggling over a few pence then perhaps subconsciously it's not something you really want at this stage.

I blame the QE nonsense in the US for my dithering. Or more accurately the potential effects of its tapering. I think because it's EM we're talking here, that I (rightly or wrongly) expect further adverse reaction to more tapering announcements. Which as you said John, might mean subconsciously I don't want to buy right now.

Ultimately I need to convince myself that any pullback would be temporary and that in the long run, the only way is up.......it's just that the greedy devil in me is telling me to hang fire for a bit.

Anyone brave enough to predict the immediate future for emerging markets in light of what may or may not happen in the US?

gadgetmind

TCA wrote: »

Ultimately I need to convince myself that any pullback would be temporary and that in the long run, the only way is up.......it's just that the greedy devil in me is telling me to hang fire for a bit.

Up is *not* the only way, and if you can't handle that, then stick with cash.

And not only can no-one predict the immediate future in EM, they can't predict *any* future in *any* asset class.

You need to diversify, not take crazy bets, and learn how to enjoy every part of the roller coaster. The highs are a time of worry, but you also get to shriek a bit when you look at all the pretty pretty blue in your portfolio. The lows are (for me) a time of euphoria as I leap on the bargains (which you can only do if you have cash or bonds or gold to use to fund it) but the only other kicks to be had are winding up the gold bugs that abound at such times by telling them why I'm selling.

If you invest over multiple decades, you'll see this pattern keep on doing the rinse and repeat and TBH the times it gets interesting are when you do have some asset classes or territories at peaks and others in the troughs.

It's at times like these that you *really* discover what kind of an investor you are.

Wilkins

gadgetmind wrote: »

The lows are (for me) a time of euphoria as I leap on the bargains (which you can only do if you have cash or bonds or gold to use to fund it)

Me too, but I'd feel less comfortable if I had less cash. Can't imagine how it must feel to be cashless at the bottom of a bear market.

TCA

gadgetmind wrote: »

Up is *not* the only way, and if you can't handle that, then stick with cash. If you invest over multiple decades, you'll see this pattern keep on doing the rinse and repeat and TBH the times it gets interesting are when you do have some asset classes or territories at peaks and others in the troughs.

It's at times like these that you *really* discover what kind of an investor you are.

Yes, I appreciate the imminent rollercoaster ride. What I should have said was that we expect share prices to generally move up (over decades or whatever), so despite the troughs to ride out there will also be peaks. If there wasn't and there no was no expectation of finishing "up", then likely none of us would invest at all.

I'm prepared to invest my cash and leave it come what may. Just trying to make that investment at the best possible time. We read much about saving fractions of percentage points on costs and how this can mount up to great savings over the years. So it makes sense to me to buy at any price cheaper if I can. Of course nobody can predict we're not at the bottom of anything right now, so if I don't buy tomorrow I may lose out on some gains. There lies the rub. I guess therefore I'm betting on further dips or I'd have bought already.

I'm watching carefully though, as my plan is to be fully invested by around April. So I'll be plunging in one way or another before then.