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No harm, no foul, but no money either

The Fed went with a 25 point cut, which was pretty much what the market was expecting.  What they weren't expecting was that it wasn't a unanimous decision, one board member voted against the rate cut.  This, along with news of possible renewed inflation, sent the market into a tailspin for a half hour or so.

Unfortunately, I had an appointment at 2:00, 45 minutes after the Fed announcement, so I couldn't sit there all afternoon and monitor my stocks.  I'd purchased my shares of UYG at $54.50 a couple days ago and just before the announcement it had reached $55.46, a tidy little 1.8% increase.  Alas, after the Fed announcement, it crashed down to $53.46, a loss of about 1.9%.  I didn't want to sell at a loss, and I knew I wouldn't get home before the market closed, so I placed a limit sell order with a target of $54.55, which would basically pay for the commission fees, then got in my car and drove off.

As I pulled into town, I remembered Sirius offers the audio portion of CNBC, so I tuned to it.  The market had gone from being in the hole to being up 170 points!  I started kicking myself because I knew that it was too late to cancel my sell order; it would have gone through long before I could reach a place with a computer.  I was certain I'd missed out on thousands of dollars that I could have made had I issued a market-on-close sell order instead.

First thing I did when I got home was check the stock prices.  I was soooo relieved when I saw that the closing price was only $55.01, only 46 cents more than I'd sold it for.  It turned out I had been beating myself up all afternoon over just a few hundred dollars.

At least my other ETFs and mutual funds (mostly foreign) did exceptionally well.



( 4 pieces of cheese — Leave some cheese )
Nov. 1st, 2007 07:23 am (UTC)
Got any stocks you'd recommend for good short-term growth? I'm getting nervous about AAPL. I mean, I'm a huge believer in the company, but I think the stock's way overvalued right now. It's starting to look to me like EBAY did back in 2000; getting too high for its own good. I thought about DE but it looks like it's been trading sideways the last month or so. So what looks good to you now? Do you have any money in the China market?
Nov. 1st, 2007 02:47 pm (UTC)
I heard on CNBC that one analyst has placed Google's 12 month target at just shy of $1000. GOOG was at $500 just a month and a half ago and it closed at $707 yesterday.

I have about 15% of my portfolio in the Matthews China Fund (MCHFX), which has made over 56% since April. 1 year performance is 120% There are some signs of a bubble forming, but if it's anything like the Dot Com bubble, it may take several years before it bursts.

There is an ETF for the Chinese market, iShares FTSE/Xinhua China 25 Index Fund (FXI). It's up 124% for the past 1 year. I haven't invested in this fund, though, so I don't have any experience with it first hand. Its performance seems to be very slightly better than the Matthews China Fund so far, though FXI has only been around for a year, MCHFX is over 5 years old.

I've also got about 5% of my money in the Matthews India Fund (MINDX). In less than a month, it's gone up 11%! 1 year performance is 54%. India is likely going to be the next China.

At the end of August, I purchased 3 international ETFs. iShares MSCI Canada (EWC) has gone up 18%, iShares MSCI Australia (EWA) has gone up 20%, and the BLDRS Emerging Markets 50 Index ETF (ADRE) has gone up 27.5%. All three of these are EXTREMELY volatile, often having swings of 3 or 4 percent in a single day.

I'm very bullish on emerging markets and increasingly bearish on US stocks. Not to say that I'd avoid the US entirely, but I'll likely stick to mega-cap companies with strong international exposure.
Nov. 4th, 2007 08:48 pm (UTC)
Wow, very informative! Thank you! Think I'll steer clear of India, tho, in light of the current instability growing in Pak. That situation could become very nasty very quickly...

Did you go through a broker to get those funds? I think I'd probably have to, but I've never purchased a mutual fund. Might be best to get a broker's guidance, at least...
Nov. 5th, 2007 03:46 am (UTC)
TD Ameritrade. The Matthews funds are No Transaction Fee and No Load, so they don't cost anything to get into or out of (though there is a 2% penalty if you sell within 3 months of purchase).

You should avoid getting into a mutual fund near the end of the year, because that's when they usually issue dividends, which are taxable. No point in buying into a fund and having to immediately pay taxes on it before it even makes any money.

ETFs are traded like stocks, so you can hop in and out without any penalties, but you do have to pay commission ($9.99 through TD Ameritrade) every time you buy or sell.
( 4 pieces of cheese — Leave some cheese )