Author Topic: Time to bail on my Fidelity fund?  (Read 4425 times)

D Bopp

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Time to bail on my Fidelity fund?
« on: January 30, 2015, 09:17:15 PM »
Hello! First post here.  Just wanted to ask thoughts on keeping or selling one of my funds in my Roth.

I have about $3K in FLATX, which is a Fidelity Latin America fund.  It was a great performer up until about a year or two ago. It's at $22.56 per share, and my cost basis is around $16 per share.  But at one point in 2011, it reached $60 per share.

Fees are at 1.08%. Very high.  I want to put the money into my lower cost Spartan 500 Index fund, but feel like the day I bail on the FLATX is the day it will start its ascend back up into the 50-60 range.

Any thoughts would be helpful. Thank you.



wtjbatman

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Re: Time to bail on my Fidelity fund?
« Reply #1 on: January 30, 2015, 09:27:26 PM »
Should have sold it at $60 a share

Dodge

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Re: Time to bail on my Fidelity fund?
« Reply #2 on: January 30, 2015, 11:08:01 PM »
Yes it's time to bail. But not because the fund is doing poorly, because the fund has high fees, and isn't diversified.

humblefi

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Re: Time to bail on my Fidelity fund?
« Reply #3 on: January 30, 2015, 11:25:33 PM »
I usually like to compare any non-Vanguard fund against a similar Vanguard fund. Non-Vanguard funds are, almost always, more expensive than Vanguard funds.
The question I ask is: for the addition expense, what am I getting in return?

One Vanguard fund that has Latin America investments is VMMSX: https://personal.vanguard.com/us/funds/snapshot?FundId=0752&FundIntExt=INT#tab=0
Click the COMPARE button and compare it with your fund (FLATX). The answer should tell you that FLATX is not a good option in many ways...cost, diversification, returns, etc.

If you do decide to bail from FLATX, be careful of the following:
+ Redemption Fee            1.50%
+ Redemption Period    90 days

A good way to avoid loss of money is to stop adding any money to the fund for 90 days. And then withdraw money from the fund.
Else, you will pay 1.50% penalty called Redemption Fee. If you already knew this, my apologies....please ignore it.


jmusic

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Re: Time to bail on my Fidelity fund?
« Reply #4 on: January 31, 2015, 12:28:27 AM »
Part of the problem with foreign investment funds is that you're also exposed to the currency markets.  Over the last six months, the US Dollar has been exploding higher, reducing the apparent returns of foreign investments.  The dollar strength is also the cause of the super low oil prices.

On the flipside, if someone had a different home currency than USD, investing in the US markets would have even more stellar returns...

D Bopp

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Re: Time to bail on my Fidelity fund?
« Reply #5 on: January 31, 2015, 05:59:53 AM »
Thanks for the advice. I did buy this fund about 9 or 10 years ago, and have seen it go through it's highs and lows.  I feel I should sell too, but it hurts to see the balance that used to be above $9,000 now sit down right below $3,000.    Guess I should look at it as a sunk cost at this point.

humblefi

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Re: Time to bail on my Fidelity fund?
« Reply #6 on: January 31, 2015, 09:39:27 AM »
Thanks for the advice. I did buy this fund about 9 or 10 years ago, and have seen it go through it's highs and lows.  I feel I should sell too, but it hurts to see the balance that used to be above $9,000 now sit down right below $3,000.    Guess I should look at it as a sunk cost at this point.

One other option....if you do not need the money right away, keep the $3000 there....but do not invest anymore in the fund. As long as the entire Latin index is down, it will come back up.

Jim from QLD

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Re: Time to bail on my Fidelity fund?
« Reply #7 on: January 31, 2015, 08:29:38 PM »
Thanks for the advice. I did buy this fund about 9 or 10 years ago, and have seen it go through it's highs and lows.  I feel I should sell too, but it hurts to see the balance that used to be above $9,000 now sit down right below $3,000.    Guess I should look at it as a sunk cost at this point.

I guess you just have to keep in mind when you make your decision to hold or sell, you should try and ignore your hope that it will re-ascend to that level. You have to objectively ask whether it is a good investment on its current metrics.

As others have said it's not diversified and has high fees, so unless your confident I'd liquidate.

dungoofed

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Re: Time to bail on my Fidelity fund?
« Reply #8 on: January 31, 2015, 11:06:08 PM »
What is your target allocation for LATAM stocks as per your Investment Policy Statement? With the strong USD I'd guess you should be buying now instead of selling. Selling low is the reason so many people don't beat the market over time.

Those fees, while high compared to your S&P500 index tracker, are par for the course when investing in illiquid, underdeveloped markets. Apples and oranges, you can't compare.

innerscorecard

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Re: Time to bail on my Fidelity fund?
« Reply #9 on: February 01, 2015, 07:40:36 AM »
It's funny how reliable human nature is. In this case, hot money with no actual strategy chasing returns and then bailing out in times of underperformance.

johnny847

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Re: Time to bail on my Fidelity fund?
« Reply #10 on: February 01, 2015, 07:45:26 AM »
Yes it's time to bail. But not because the fund is doing poorly, because the fund has high fees, and isn't diversified.
Precisely.

D Bopp

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Re: Time to bail on my Fidelity fund?
« Reply #11 on: February 01, 2015, 11:57:06 AM »
It's funny how reliable human nature is. In this case, hot money with no actual strategy chasing returns and then bailing out in times of underperformance.



I invested in the roth IRA 10 years ago, when I was 25 and didn't know a thing about how to properly select funds. So come on, cut me a little slack.  I have many other funds doing well and performing along the standard trends. I was just curious about this one fund.  Trying to figure out when to hold em and when to fold em.
« Last Edit: February 01, 2015, 11:58:57 AM by D Bopp »

Gone Fishing

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Re: Time to bail on my Fidelity fund?
« Reply #12 on: February 02, 2015, 09:03:20 AM »
What does $3k represent as a % of your total investments?  If it is more than 5% or so I would sell at least some of it.

innerscorecard

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Re: Time to bail on my Fidelity fund?
« Reply #13 on: February 02, 2015, 09:14:23 AM »
My advice is that you shouldn't look at past performance when deciding whether to keep or hold. You should look at process and your investment goals. If you want to invest in Latin American equities, and you think the fund managers at this fund have a good investment process and discipline, based on your reading of the prospectus and what they say they do, you should hold. If you don't think they have a good process, or you have changed your investment goals, you should sell.

I'm just giving you a hard time because this is what always happens to investors, whether retail or institutional. They always, always dump managers when past performance lags. And that's usually when it's actually best to stick with it. If you don't believe me look at what happened with Bruce Berkowitz and the Fairholme Fund.

D Bopp

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Re: Time to bail on my Fidelity fund?
« Reply #14 on: February 02, 2015, 01:19:39 PM »
My advice is that you shouldn't look at past performance when deciding whether to keep or hold. You should look at process and your investment goals. If you want to invest in Latin American equities, and you think the fund managers at this fund have a good investment process and discipline, based on your reading of the prospectus and what they say they do, you should hold. If you don't think they have a good process, or you have changed your investment goals, you should sell.

I'm just giving you a hard time because this is what always happens to investors, whether retail or institutional. They always, always dump managers when past performance lags. And that's usually when it's actually best to stick with it. If you don't believe me look at what happened with Bruce Berkowitz and the Fairholme Fund.

I know, I was kinda kidding anyways. I apreciate the input. My goals are really to just invest in the market and kind of put it on cruise control.  I'm pretty good with my own finances, but don't claim to be any kind of market expert. I'd like to be aggressive and can stand some market swings since I have no plans to pull money out any time soon. But I'm not looking for the next penny stock or anything.