Ack! WTH is up with Emerging Markets??

[BA.]

Ok you market sharks, why are the Emerging Market funds in a downward spiral??

The 'correction' is around 20% down now, which just happens to be equal to the last emerging market correction several months ago.

Should I get out or is this thing going to come back? What happens between now and the December 10th Fed meeting??


…..and they say understanding women is hard! sheesh!

[69Pony]

Pretty general question....

What emerging market fund? Europe, Asia, South America? All have been doing fine with most firms (Vanguard, T. Rowe, Franklin) with some better/worse based on local events and currency. Europe might be tough now with the Euro so high - makes for tough margins. South America might be your best bet but also offers some of the most risk. Asia is a tough nut to figure out right now.

Remember Emerging Market funds are high risk / high reward so couple them with the better blue chip and balanced funds to ensure you don't take an across the board hit.

[Boyd]

I agree; what "emerging market" does your particular fund invest in? I moved 80% of my Vanguard funds overseas (Asia) at the beginning of the year and so far my personal rate of return is about 18% since said move. That very decent 18% return would have been much greater if it weren't for an income fund I was in which had heavy holdings in so called "asset-backed" mortgage bonds. When the housing market started to tank, I did some investigating into the funds I held. Fortunately, only the income fund was directly affected-and I was able to stop the bleeding before it got any worse.

What's ironic is that I was only in the income fund (normally considered a very low-risk type of fund) to help offset the volatility and risk of my overseas funds.

Now, to answer your question: IMO, any emerging market investment should be held long-term. So my advice is to hold on to it. Until our government realizes the financial crisis that is currently occuring, and stops lowering interest rates to spur spending (therefore giving the economy an artificial boost) the majority of my money is going overseas.

[BA.]

Ok, my bad, I should have said the Asia market in particular.

I didn't specify a single fund because the 8 or so I checked were ALL down similar amounts. It really looked like there would be a reason for something like that. eg.- a news item or something to trigger off computer-based trades maybe....

Wish I had more time or a nice digest. For now I barely have time to look at Kiplingers and maybe, if I'm lucky, one other mag/website/show.