Thank you for you comments and questions. Let me try to make this brief:

- We do not own DND now as we sold it when it declined 8% off its recent high.
- We believe in the continued long-term viability of Asian and emerging markets countries but are not willing to live with a 20-40% decline as some have experienced during the past few years.
- By capturing upside momentum investors are able to participate where they normally wouldn’t as long as they have a specific sell discipline. So I guess that would make us guilty as charged.
- It’s not fair to judge performance of emerging market ETFs to the S&P 500, but the benchmark we use for our managed clients is the S&P. If we can provide alpha and reduce risk by incorporating emerging market ETFs into our plan, we are in a better position to reach our goals.

Thank you for your comments and I fully appreciate your perspective.

All the best,

Tom

Just in the last year, it dropped 8% from its high three times (2/23 @ 67.42 to 3/5 @ 60.98, 7/23 @ 79.50 to 8/3 @ 71.27, and 10/31 @ 94.17 to 11/9 @ 86.50). It regained its 50-day SMA in the first two of those cases (on 3/12 @ 65.00 and 8/24 @ 74.69). Also, the 200-day SMA was breached on 8/15 @ 67.26, but the 50-day was regained on 8/24 @ 74.69. Aren’t you selling low and buying high, generating trading costs, and being eaten alive by short-term capital gain taxes (assuming a taxable account)?

Given the inherent volatility in emerging markets, isn’t 8% a bit of a hair trigger? If you believe in the fundamentals of the market enough to invest, doesn’t an 8% drop just make it a better buy? If the answer to that question is no, aren’t you also guilty of momentum investing?

Another thing, I’m not sure if it’s you or the author of the article, but I’m always cyncial when someone talks about emerging markets almost exclusively in an article and then benchmarks to the S&P 500.