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Old 05-22-2015, 12:53 PM
 
472 posts, read 512,839 times
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I feel OP knows the answer (reduce exposure) but just wants somebody to give him an answer otherwise.

Bear market could be upon us next week/month/year. Only diversification is going to make the ride down a little less unbearable.

Reduce exposure and diversify.
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Old 05-22-2015, 07:18 PM
 
Location: New Hampshire
242 posts, read 242,898 times
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Quote:
Originally Posted by ThisDamnLife View Post
I feel OP knows the answer (reduce exposure) but just wants somebody to give him an answer otherwise.

Bear market could be upon us next week/month/year. Only diversification is going to make the ride down a little less unbearable.

Reduce exposure and diversify.
I actually reduced my holdings in FBIOX and fcntx by about 10% of each and went into a different mutual fund. One that is not necessarily in the biotech/health care field.

I am ok with being somewhat heavy into biotech and healthcare but 45% was a bit too much exposure for me. I am down to about 35% and I am good with that since I don't want to sell out of FBIOX completely and the etfs are a new investment vehicle for me so I want to get used to them in a field I am somewhat knowledgable in.
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Old 05-22-2015, 10:56 PM
 
488 posts, read 815,956 times
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FBIOX is not as risky as a biotech index fund like IBB (though it's still high risk), and the fund manager seems pretty good. One year return is about 45%, vs 55% for IBB. FBIOX will probably be less tax efficient than an index fund.
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Old 05-22-2015, 11:33 PM
 
26,148 posts, read 21,379,492 times
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Quote:
Originally Posted by jmarchand1981 View Post
I actually reduced my holdings in FBIOX and fcntx by about 10% of each and went into a different mutual fund. One that is not necessarily in the biotech/health care field.

I am ok with being somewhat heavy into biotech and healthcare but 45% was a bit too much exposure for me. I am down to about 35% and I am good with that since I don't want to sell out of FBIOX completely and the etfs are a new investment vehicle for me so I want to get used to them in a field I am somewhat knowledgable in.
I'm not sure if you missed my post but before your change over 60% of your investments were healthcare based I'm not sure if you'd be under 35% or not afterwards which is still really high
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Old 05-23-2015, 05:28 AM
 
Location: New Hampshire
242 posts, read 242,898 times
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Originally Posted by Lowexpectations View Post
I'm not sure if you missed my post but before your change over 60% of your investments were healthcare based I'm not sure if you'd be under 35% or not afterwards which is still really high
I got that. I am assuming that you are using the top holdings from the mutual funds to arrive at that number, right? Fcntx certainly has some healthcare holdings but their denominator is just so large, so many holdings, that I am ok with fcntx being a feeder fund.

As for the 35% that I am currently at, I am ok with the figure. Towards the end of the summer I am going to sell out of either fhlc or xlv. This will reduce my healthcare reliance further. As they are new investments for me, I need to get to a point of profitability before selling(I don't see either as true dogs so profit shouldn't be too far away). Buying into both at around the same time was pretty idiotic of me. I regret it from a strategic standpoint but if I hold for a few months I can learn a lesson and earn some money at the same time.
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Old 05-23-2015, 06:09 AM
 
Location: New Hampshire
242 posts, read 242,898 times
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Quote:
Originally Posted by Lowexpectations View Post
I'm not sure if you missed my post but before your change over 60% of your investments were healthcare based I'm not sure if you'd be under 35% or not afterwards which is still really high
Quote:
Originally Posted by jmarchand1981 View Post
I got that. I am assuming that you are using the top holdings from the mutual funds to arrive at that number, right? Fcntx certainly has some healthcare holdings but their denominator is just so large, so many holdings, that I am ok with fcntx being a feeder fund.

As for the 35% that I am currently at, I am ok with the figure. Towards the end of the summer I am going to sell out of either fhlc or xlv. This will reduce my healthcare reliance further. As they are new investments for me, I need to get to a point of profitability before selling(I don't see either as true dogs so profit shouldn't be too far away). Buying into both at around the same time was pretty idiotic of me. I regret it from a strategic standpoint but if I hold for a few months I can learn a lesson and earn some money at the same time.

I actually just went through the holdings of the mutual funds. You are spot on. All of the funds that I am involved in have 15-20% holdings in healthcare. I see that as a moving target (meaning that the fund manager would move out of health care if they saw fit in doing so). I didn't realize this until I began to consider what you were saying. I guess I will live with the higher number for the time being until I am able to move out of either of the ETFs that I invested in.
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Old 05-23-2015, 09:45 AM
 
Location: The Pacific NW.
879 posts, read 1,956,773 times
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Quote:
Originally Posted by jmarchand1981 View Post
As they are new investments for me, I need to get to a point of profitability before selling
Why, exactly? Other than transaction fees, what practical difference does it make if you sell them now and "get to your point of profitability" with another fund in a different sector?

Quote:
Buying into both at around the same time was pretty idiotic of me. I regret it from a strategic standpoint but if I hold for a few months I can learn a lesson and earn some money at the same time.
You might learn a couple of other lessons too:

1) Holding on to investments because of an emotional aversion to "taking a loss" is never a good reason to do so.

2) Even funds that "aren't dogs" can take a long time to see profitability if the market takes a downturn.
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Old 05-23-2015, 02:16 PM
 
Location: New Hampshire
242 posts, read 242,898 times
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Quote:
Originally Posted by LongArm View Post
Why, exactly? Other than transaction fees, what practical difference does it make if you sell them now and "get to your point of profitability" with another fund in a different sector?


You might learn a couple of other lessons too:

1) Holding on to investments because of an emotional aversion to "taking a loss" is never a good reason to do so.

2) Even funds that "aren't dogs" can take a long time to see profitability if the market takes a downturn.
I just don't see the need to knowingly take a loss Now when the alternative is to potentially take a loss later.
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Old 05-23-2015, 02:58 PM
 
Location: The Pacific NW.
879 posts, read 1,956,773 times
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Quote:
Originally Posted by jmarchand1981 View Post
I just don't see the need to knowingly take a loss Now when the alternative is to potentially take a loss later.
And that is exactly what I mean when I say:
Quote:
1) Holding on to investments because of an emotional aversion to "taking a loss" is never a good reason to do so.
The fact is, you already HAVE the loss. Whether it's realized or unrealized doesn't make a lick of difference, except with the realized loss you 1) get a tax benefit, and 2) you now have that money available to put into something better (or more suitable). This is a concept that's difficult to grasp for many new investors.
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Old 05-25-2015, 10:12 AM
 
2,801 posts, read 3,148,812 times
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For what it's worth: my momentum-based Fidelity Selects trading model is currently still long fbiox. But that can change any week.
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