It is the nature of index funds that long term they are generally safe bets. Short term you are taking your chances. Of course anyone looking for really short term safe bets should not be in stocks anyways.

Most index funds have certain things in common. Long term they go up. In the short term when there is economic downturns you are likely to feel the pain. I would never recommend an index fund to anyone with less than a 5 yr investment horizon. Normal market volatility could make it a fairly high risk investment. Index funds make good sense for people with a 10 yr plus horizon. For this reason they make excellent investments for IRAs and 401Ks (which far too frequently offer a poor selection of managed funds).

Emerging markets are where you will see the most dramatic gains during the good years. Sadly during the bad ones (like now) all index funds, but especially emerging markets, can start to smell like last weeks trash left to ferment for a week in 90 degree heat.

Should you stay or cut your losses and bail out? Only you can decide that. Consider your investment horizon and your tolerance for pain. One nice thing about index funds for those with a long term outlook is that their ten year averages outperform about 75-80% of managed funds. When you buy an index fund and hold onto it for 10+ yrs you are basically buying a solid B performer. The longer your investment horizon the better sense index funds make.

Another advantage to index funds worth noting; presuming you are not buying for the short term, they are the only really safe "buy & hold" investment out there. Individual stocks and even mutual funds require a certain amount of attention. With index funds you can pretty much just drop the money in there and forget about it for 10 or 15 yrs and come back to find a nice profit that will most likely have matched or beaten 3/4 of the managed funds over the same period. There is no other investment that I can think of that you can make that claim for.

A parting word of caution. Remember diversification. Even though VEIEX is an index fund, it's still based on emerging markets. That means more volatility than say the S&P 500. I would not recommend putting more than 1/3 of your investments in an emerging markets based index fund. And once you drop inside your original investment horizon you need to reassess your portfolio and decide if you are still good for 10 years or so. If your not, then you will want to adjust your portfolio and move at least some money into other more short term investments.