Picked up a Tad of VEMAX [Vanguard Emerging Markets Index]

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john94549
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Picked up a Tad of VEMAX [Vanguard Emerging Markets Index]

Post by john94549 »

Maybe I'm chasing rainbows, but shares seem to be on sale these days. For a fact, my cash hoard in VMMXX ain't doin' squat. Still think emerging will be a good investment going forward, but, hey, it's only $10K. In the grand scheme of things, I'm betting house money, as my domestic stocks have done well this annum
z3r0c00l
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Re: Picked up a Tad of VEMAX

Post by z3r0c00l »

Fund has recovered by a comparable percentage to other stock funds, more than doubling from the recession lows. Hard to say it is on sale more than anything else, but it is also a very good fund so you can do worse!
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The Wizard
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Re: Picked up a Tad of VEMAX

Post by The Wizard »

john94549 wrote:Maybe I'm chasing rainbows, but shares seem to be on sale these days. For a fact, my cash hoard in VMMXX ain't doin' squat. Still think emerging will be a good investment going forward, but, hey, it's only $10K. In the grand scheme of things, I'm betting house money, as my domestic stocks have done well this annum
House money, eh?
Are you sure you're in the right forum here?
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wesleymouch
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Re: Picked up a Tad of VEMAX

Post by wesleymouch »

Both emerging markets (vwo) and the developed world index (VEA) are cheaper than US markets and will likely give better returns going forward.
z3r0c00l
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Re: Picked up a Tad of VEMAX

Post by z3r0c00l »

wesleymouch wrote:Both emerging markets (vwo) and the developed world index (VEA) are cheaper than US markets and will likely give better returns going forward.
No way to know this. Your best bet is to own them all. Literally, that is the mathematically optimal bet considering the limited knowledge we have about the future. VTIAX probably better covers the international. But "only" 10K? This is def. a fun way to play with some money, and far safer than going to a casino!
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xram
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Re: Picked up a Tad of VEMAX [Vanguard Emerging Markets Inde

Post by xram »

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Last edited by xram on Fri May 31, 2013 8:23 am, edited 2 times in total.
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dbr
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Re: Picked up a Tad of VEMAX [Vanguard Emerging Markets Inde

Post by dbr »

john94549 wrote:Maybe I'm chasing rainbows, but shares seem to be on sale these days. For a fact, my cash hoard in VMMXX ain't doin' squat. Still think emerging will be a good investment going forward, but, hey, it's only $10K. In the grand scheme of things, I'm betting house money, as my domestic stocks have done well this annum
I'm curious to know if you wanted a comment on this or if there is a question involved? I guess the question could be whether or not people think EM is "on sale." My answer is I don't know.
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john94549
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Re: Picked up a Tad of VEMAX [Vanguard Emerging Markets Inde

Post by john94549 »

My request will fill at today's closing NAV, which is down close to 5% YTD. That contrasts with just about everything else this year, which is up. That meets my smell test for "buying low". Mind you, this is not a trade. I'm actually in emerging markets for the quite long term, and this buy merely added to my position.
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Kevin M
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Re: Picked up a Tad of VEMAX [Vanguard Emerging Markets Inde

Post by Kevin M »

What is your target allocation to EM? Were you below it by $10K before today's trade?

When I've glanced at it lately, my EM allocation doesn't seem to have deviated far from my target of 25% of international. Just checked; looks like about 25.5% of international. Not buying.

Why do you have a hoard in MM when you can get 1% in a savings account or 2% in a CD? I admit my MM builds up when I rebalance out of bond or REIT funds in IRA accounts, but that motivates me to go hunting for good CD deals. Never in taxable accounts, since it's just as easy to sell and transfer to a savings account.

Kevin
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wesleymouch
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Re: Picked up a Tad of VEMAX

Post by wesleymouch »

z3r0c00l wrote:
wesleymouch wrote:Both emerging markets (vwo) and the developed world index (VEA) are cheaper than US markets and will likely give better returns going forward.
No way to know this. Your best bet is to own them all. Literally, that is the mathematically optimal bet considering the limited knowledge we have about the future. VTIAX probably better covers the international. But "only" 10K? This is def. a fun way to play with some money, and far safer than going to a casino!
i own both but overweight what is cheap. P/B of international about 70% that of US markets. As Larry Swedroe says valuations matter.
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Kevin M
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Re: Picked up a Tad of VEMAX

Post by Kevin M »

wesleymouch wrote: i own both but overweight what is cheap. P/B of international about 70% that of US markets. As Larry Swedroe says valuations matter.
But risk also matters. There's a reason for the difference in P/B values. I don't overweight, but with an allocation to international of 40% of equities, I think I already have enough weight there. It has hurt performance over the last few years, but hopefully over the long run things will even out, as they often (but not always) do.

Kevin
If I make a calculation error, #Cruncher probably will let me know.
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john94549
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Re: Picked up a Tad of VEMAX [Vanguard Emerging Markets Inde

Post by john94549 »

Kevin, I've always kept roughly 15 - 20% of my total stock allocation in international, with a modest tilt to emerging. This recent buy just brings my allocation back closer to 20%, by adding to emerging. In dollar terms, VTIAX will be roughly $60K and VEMAX roughly $20K. My wife has a tad of VTIAX as well, but no emerging. This buy, in the grand scheme of things, was merely fashioned to get us closer, with the tilt best positioned to afford a "good buy".

Stated another way, our international AA was a tad out-of-whack. We could fix it by (a) adding VTIAX, or (b) adding VEMAX, Chose the latter.
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