selling low? Vanguard Precious Metal and Mining - VGPMX

[FLBiker]

We are primarily 4 fund investors -- 50% US stock, 33% INT stock, 5% REIT, 10% bond, 2% other.  Around ~$450K total, mostly in retirement accounts.

The "other" right now is split between lending club and Vanguard Precious Metal and Mining (VGPMX).  I put $10K in VGPMX in Jan 2011 and it has fallen steadily since (currently ~$3500).  I keep saying I'll sell and put it in index funds once it gets back to $10K, but I'm wondering if that is dumb.  What do you think?  Should I pull the trigger now, or keep waiting?

This in in a Roth IRA.  We've also got a 403b, a trad IRA, and a taxable account.  If this was in taxable, I'd feel better about selling it, I guess.

Thanks for your opinions!

[forummm]

Stick to your AA. If you decide that having the 2% other is a bad idea and want to change it permanently, then do it. But don't react to market prices.

[FLBiker]

OK, thanks for the advice.  I'm comfortable with the 2% other, and I still feel like VGPMX is a decent choice.  I just think my timing was lousy.

[I'm a red panda]

I'm in a similar situation.  I have money in Precious Metals (in a different company's fund) and it's been there for almost 10 years. The fund when WAY high, and is now really low.

I, however, was never real comfortable with the volatility of the fund, but trusted the person who invested it. So I'm not real comfortable with the asset allocation.

I do not think it will sink to 0 losing all my money (and I have had that happen with stocks...), so I've set a "sell" price ($25; I think at it's high it was close to $70), and when it reaches that- I'm getting out.  Right now though, it is TOO low for me to want to sell ($10) because I feel like there has to be a limit to it tanking.

[FLBiker]

I'm in a similar situation.  I have money in Precious Metals (in a different company's fund) and it's been there for almost 10 years. The fund when WAY high, and is now really low.

I, however, was never real comfortable with the volatility of the fund, but trusted the person who invested it. So I'm not real comfortable with the asset allocation.

I do not think it will sink to 0 losing all my money (and I have had that happen with stocks...), so I've set a "sell" price ($25; I think at it's high it was close to $70), and when it reaches that- I'm getting out.  Right now though, it is TOO low for me to want to sell ($10) because I feel like there has to be a limit to it tanking.

Hmm, this is similar to how I feel (although the person who invested it was 4-years-ago-me).  Maybe having a "compromise" price that I want it to get back to would be a good idea.  Thanks for this!

[I'm a red panda]

Hmm, this is similar to how I feel (although the person who invested it was 4-years-ago-me).  Maybe having a "compromise" price that I want it to get back to would be a good idea.  Thanks for this!

The person was my husband. So really, I have to take responsibility because I agreed to it- I just really hated the idea.  (It's part of my Roth IRA; his is more conservative, so together they balance out.)

[Frs1661]

Would you buy it today and anticipate a 285% gain in that investment? That's what you are hoping for by 'waiting for it to come back to 10k'.

Sounds like anchoring to me http://www.investopedia.com/terms/a/anchoring.asp

That said, trust your AA as long as the assumptions and goals that led you to put it in place are still valid.

Sent from my Nexus 4 using Tapatalk

[thd7t]

I would sell this.  You've sunk the cost.  You can wait for it to go back up, but you're probably going to match inflation, which is typical growth for precious metals.  Don't "wait for a compromise cost".  Put the money somewhere that it will appreciate.

[James]

I don't understand "buy and hold" plans for precious metal stocks. Sure, if you want to time the market you may get lucky and profit in the wide swings of precious metals, but historically buy and hold doesn't do much.

No, you shouldn't sell it now due to the current price. If it is part of our allocation then you should be re-balancing and add more because it is down, keeping it at your allocation percent. That is the whole purpose and benefit of re-balancing your portfolio.

But, in my opinion you should sell it now because precious metal stocks don't serve any particular value in a portfolio, but that is not your question.