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Wating for Emerging Market to Retreat?
Old 01-29-2006, 08:44 AM   #1
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Wating for Emerging Market to Retreat?

I planned to put some money into an emerging market fund (e.g., VMO) on January 3 but failed to execute. My intent is allocate about 5%. Since then, the fund has gone up more than 10% and does not appear to ever fall. I am stilling wating. Has anyone still waiting for an opportunity to buy?

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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 08:48 AM   #2
 
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Re: Wating for Emerging Market to Retreat?

Not us folks, that have admitted that we are not smart enough (or lucky enough) to time the market.
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 11:50 AM   #3
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Re: Wating for Emerging Market to Retreat?

I have been trying to construct my portfolio.* I have had no emerging market exposure.
On Jan 20 I decided to take a half position as I figured you have to get in sometime, and you cant time the market.* *As luck would have it I am up 8% in a week* ( I'm in Canada and I purchased EEM ) Now I have to figure out when to put more in.?
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 12:59 PM   #4
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Re: Wating for Emerging Market to Retreat?

Quote:
Originally Posted by Spanky
I planned to put some money into an emerging market fund (e.g., VMO) on January 3 but failed to execute. My intent is allocate about 5%. Since then, the fund has gone up more than 10% and does not appear to ever fall.* I am stilling wating. Has anyone still waiting for an opportunity to buy?

Spanky
Emerging markets (using EEM) have had a nice run this month.* Right now they look a bit overbought much like oil and oil service did last week. The oils gave back about 4-5% and then took right off again which is very likely what EM will do.* If you've looked backwards 10 years or so you know EM's can give you quite a ride on the downside.* On the other hand if you think 10 years the other direction, it is hard to not be bullish on the group.* I think everyone needs 5%
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 02:49 PM   #5
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Re: Wating for Emerging Market to Retreat?

I want some EM exposure, too, but I am too cheap to chase it now. When there is a market crash EM stuff gets hurt the worst (check out what happened in 1998). I will wait for the next market crash.
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 06:48 PM   #6
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Re: Wating for Emerging Market to Retreat?

A typical case of analysis paralysis? Thats my biggest fault (among others). Over a year ago I started from scratch...liquidated everything my CFP bought for me. Transferred to Vanguard and s l o w l y started an allocated and diversified port. I scoffed at the energy funds and vipers...they CAN'T get any higher.

But I did buy a couple intn'l funds and I thought my biggest risk was the REIT fund. They all did great... who knew. To date I'm still only 50% invested. I make small moves when it seems right. Like picking up more of the TIP fund last week. Trying to have my cake and eat it too. Like brewer says, "waiting for the next crash slump".

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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 09:03 PM   #7
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Re: Wating for Emerging Market to Retreat?

If someone feels strongly that EM (or most any single investment) is overpriced, or gone up too much, then I don't think it's a big deal to just not buy it. So long as you won't change your mind should it double in a year. And your asset allocation without the item is reasonable. (I think a portfolio without EM can be reasonable.)

About a year or year and a half ago, I looked at REITS, and thought they deserved an allocation in my portfolio. But, wasn't willing to buy in at those prices.
I still haven't bought, and won't, until they seem reasonably priced to me.

On the other hand, when VWO came into this world, EM had already gone way up. I bought it, even though it already had quite a run. It didn't seem overpriced to me, but I've said that before about EM, back in 96/97.

I dont' sweat the ones that "got away." There's been several things I almost bought, that then went up to the sky, but I've done fine without them. Besides, I would have sold early anyway.
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 09:28 PM   #8
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Re: Wating for Emerging Market to Retreat?

I've had a small exposure to EM (3-5%) over the past five years or so. It has had a nice run but I reduced EM exposure to around 1% last week. If the US catches a cold, EM could come down with the avian flu...
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Re: Wating for Emerging Market to Retreat?
Old 01-29-2006, 10:22 PM   #9
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Re: Wating for Emerging Market to Retreat?

If you don't feel good about the EM funds or ETF's there is another way you can get similar, but possibly safer action.*
Funds like Fido's FSCOX buy international small caps, many of which come from developed countires like Japan, the UK and others.
However, they also buy EM's as well.* FSCOX is a few months old and it has been hot, hot, hot.
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Re: Wating for Emerging Market to Retreat?
Old 01-30-2006, 01:11 AM   #10
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Re: Wating for Emerging Market to Retreat?

This is for sure,

Quote:
When there is a market crash EM stuff gets hurt the worst (check out what happened in 1998).*
I have surpressed the memory but I think that I lost about 50% of my EM exposure around that time.* There was also a pretty sharp drop in the early '90s in asian EMs after a couple of good years previously.* I lost a bunch on that one too.

So even if you pick a good time to get in you still need to be able to handle the volatility.

One thing that I have done when I have been concerned about getting into a market segment near the high is to dollar cost average by starting with a fund with the minimum investment* (works better with open end funds to avoid comissions) and then setting up an automatic deposit so that I periodically increase my exposure.

MB
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Re: Wating for Emerging Market to Retreat?
Old 01-30-2006, 10:18 AM   #11
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Re: Wating for Emerging Market to Retreat?

I had planned on buying EM in March to continue building my portfolio. When I saw it was up 10% for January, I started second guessing myself. The P/E's are still about the lowest of any VG index fund. But I'm starting to wonder how much is too much for EM. I'll be DCA'ing in to the EM fund over the next year or so, till I get a $10000 position built up (could take longer, if the price starts dropping).
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Re: Wating for Emerging Market to Retreat?
Old 01-30-2006, 06:00 PM   #12
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Re: Wating for Emerging Market to Retreat?

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I dont' sweat the ones that "got away." There's been several things I almost bought, that then went up to the sky..
Perhaps I need to learn how to cope with stocks that simply skyrocket in less than a couple of weeks. Back in Jan 13, 06 CAMH was at $0.73. I placed a buy order at $0.7 but became void as it jumped from $0.73 to $1.65.
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