Am I overdue to bail out of International Stocks?

Question

I am heavily weighted into International (Emerging Market / Eastern Europe) stock funds. Far more than prudent allocating would indicate. It's been a great "ride." Do you think there'a bubble there? Or a house of cards? Or is Eastern Europe still just catching up after 40-50 years missed capitalism?

Answer 1

I don't believe there is necessarily a bubble you need to be concerned about. What you do need to be concerned about is being too heavily weighted in one sector. Why take this risk?
Take enough of your gains to pare down your allocation to a more prudent level. Make sure your portfolio is diversified enough to weather you through potential down periods in any one sector.

Answer 2

I have lightened up a little bit on International stocks, because the Indian company is owned (IBN) had made such a big run. I think International stocks still need to have a significant percentage of any portfolio. I am 38 years old. I think something like 40% can be in International stocks. There are still some great investments in China (like CMED or STP). In Europe, I like Vestas (VWSYF.pk) and Gamesa (GCTAF.pk) These are 2 of my biggest holdings.

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Good luck.

Answer 3

These stocks, esp. emerging markets have done quite nicely. So depending on your age, if you are under forty, you might want to diversify a bit. It never hurts to lock in some profits, If you are say 35-40 I would begin to sell, maybe 10% a month for three months. Meanwhile I would put those funds into Large cap, med, and small cap US Companies. However more info is needed, like your age, whether or not it's a retirement fund,tax situation, how much risk are u comfortable w/, r u buying stocks or mutual funds, etc. Will check back later to update if you do.

Answer 4

If you have had a great ride, it would be very prudent indeed to take some of your winning off the table. The old saying of buy low, sell high applies in all cases. I would not take everything this year though if it will drive you into a higher tax bracket. Save some for next year.