I'm 23. I have two accounts:

Roth IRA:
Invested $8,000.
$4000 is FLATX (Fidelity Latin America)
$4000 is FHKCX (Fidelity China Region)

The current value of the IRA is down to $7,239.18 (from an $8,400 recent high) due to the recent drops in the past several weeks.

My question is this. I realize I took too much risk by investing 100% of an IRA in international funds. This was probably a mistake. However, what would you do right now in this current situation? I would have lost almost as much money in the US stock market anyway, since it lost 10% in 2008 alone. However, I think there is a potential for even more loss in these international funds. Should I sell them? Should I wait for them to come back? If I do sell them should I buy into US stocks or US total stock market index fund?

I'm not sure what the best move is. I know that's impossible to predict, but I'm hoping someone with a lot more experience than me can give me their input.

I also have a regular brokerage account which had $2,500 in FLATX purchased late December, which is already down 10% in three weeks.

What would you do right now?

You're 23. Leave the money alone, go enjoy a nice dinner.

Individual investors lose the most when they buy high on the upswings and then panic in a downturn and sell low. With your time horizon, ignore all that.

Even though I'm retired and living off a pension and investments, I still see these downturns as buying opportunities. The only other change I would suggest is, long-term, try to get your money into the lowest cost index funds possible.

Wanting to move now could indicate that your total asset allocation is not appropraite for your level of risk tolerance. Hopefully your 100% Intl Roth compliments a 401K or other tax-advantaged account that gives a well-diversified portfolio of US and Intl exposure - but even if you *don't* have money in anything other than the 4k in Roth, you could look at this as an opportunity to buy more equities while they are on sale... yep, don't sell... buy! you still have another 1k you can contribute to Roth for 2008.

You're young with presumably many, many years before retirement - stay put... no need to sell at a loss. This is not a dash to the finish but rather more of an ultra-marathon. Stop checking CNBC, CNNFN, Bloomberg et al every morning if it spooks you into doing something irrational. Set you asset allocation up, DCA into those funds, and go out and enjoy our great nation... "get down to Disney World" =)

azo313 said: Or should I wait since these two funds lost so much for them to go up and then diversify later? Investment decisions should be based on what you have now, not what you used to have. If it is a good investment, hold onto it. If it isnt, then move on to something else. How much you have gained or lost to date is irrelevant going forward.

azo313 said:But I guess I'm still not clear on should I sell these right now and go 50% into US stocks for more diversity?

Don't sell! You are very early in the acquisition phase -- the best way to reach your asset allocation goals is by directing future contributions appropriately. In all the years I was building up my portfolio (both pre-tax and after tax accounts), I never once sold. If US large cap were underweighted, for example, then I would buy that until the percentages looked about right.

Don't make it too complicated. Read Bogle and William Bernstein, come up with approximate target percentages of assets (US large/small, Int'l MSCI EAFE, emerging mkts, maybe some domestic and int'l real estate) and then work towards those goals. It may take you years to reach the desired mix, but that's OK -- in the meantime you'll be buying whatever is cheapest. And don't get caught up in arguments about whether Int'l should be 30% or 35%, LOL, just read and study and come up with targets. If you ever want to adjust, do it slowly.

If everyone is jumping, it's time to stand still, whether it's a panic in the streets or a panic in the market.

azo313 said:Thanks again for the feedback.

I suppose my main concern is that these two particular funds have been gaining 50%+ per year for several years, it seems like they might crash or collapse, and there have been rumors about that happening with the Chinese market.

I'm just worried that they could go form $50 to $25 during the next 6-12 months, where I could own some US fund that likely won't go that low. Do you think these international funds could lose a huge chunk in the upcoming year, or is the US market just as risky right now?

Secondly, most of you are recommending I hold onto these since I just recently bought them. I agree with that, but where to invest my $1,000 I can still contribute to Roth this year? It's too low to buy into a new fund since the minimums are $2,500, and I don't really want to add to these ones. Perhaps a GLD ETF for Gold or any other ideas?Take a moment to reflect and think about what you are doing. What you are doing is chasing the recent best performer and buying in. First it was emerging markets, now it is gold!?!?! Basically, you are buying concentrated positions in the best performing sector. When the investments lose value (not surprising --there is a reason why they yield 50% - it is called risk), you get scared and want to sell to move to the next hot asset class. This is a really bad investment philosophy.

Simplify your investments. Buy a more diversified portfolio. You can get a Vanguard total market ETF which mimics the entire US stock market. It has a low expense ratio and is tax efficient. Buy Vanguard's total market ex-US ETF (a very new fund) which attempts to replicate foreign stocks. Buy some bonds in your retirement fund if you want some % in fixed income to lower your risk. Every time you add funds to your portfolio, add to the worst performing part to get your asset allocation in balance. Then you can sleep at night and forget all of this. (note - Vanguard is just a suggestion - there are other good low cost fund companies).

your welcome

I would not recommend buying $1,000 worth of an ETF! The fees associated with buying and selling it add significant costs.

Fidelity has some good low cost index funds that don't have transaction fees. diehards.org is a more appropriate place to discuss asset allocations and specific investments.

azo313 said:theman2, the problem is that Fidelity's index mutual funds have a $10,000 minimum, and I can only contribute $1,000 more for 2008. I don't want to sell some existing funds since there is a 90-day redemption fee period, I just bought them recently, and my total account won't value $10,000 anyway. I don't know how to invest the last $1,000 for the year, and the mutual funds have minimums. I might have to bite the fee and pay $20 comission fee to purchase $1,000 in Vanguard Total Stock Market ETF (VTI). Note the commission iss only 0.02% of the value of the purchase.

Do you have a better suggestion for this $1,000?You are not interpreting the cost correctly. $20/$1,000 = .02 which is 2%. Add the fee for selling the ETF later and you lose another 2%. Add the bid/ask spread and you lose some more.

I'd really suggest posting your question with detailed information on your current holdings at diehards.org. The people there are happy to discuss your particular situation and point you in the right direction.

Also, Fidelity does have minimums for their funds. They do have a 'four in one' index fund that has US, international, and bonds that has a $2,500 minimum in an IRA and has an expense ratio below half a percent.

Wow, I like that four-in-one fund a lot. I wish I had noticed it before.

I will probably hold these international funds, and start buying into the US index funds in 2009.