NEW YORK ( TheStreet) -- While emerging markets are presenting a great long-term opportunity, Steve Blumenthal, CEO of CMG Capital Management, tells TheStreet's Gregg Greenberg why there could be more hiccups down the road.
While the firm is not specifically involved in emerging market investments, Blumenthal said that rising U.S. interest rates will cause foreign currencies to flow out of emerging markets, back into the United States.
This was evident when emerging markets sold off, ahead of the recent Federal Reserve announcement, in anticipation that it would begin tapering its asset purchasing program, while subsequently rising interest rates.
As this headwind currently presents a couple of road bumps, he said there is a great opportunity in emerging markets over the next five to 10 years. Instead, his firm looks at the best global plays, which consist of an equally weighted 50-stock portfolio. They look for the financially strongest companies in the world in which to invest.Some of these names include: Mastercard (MA), Visa (V), Nike (NKE) and Johnson & Johnson (JNJ). Blumenthal concluded that he is also a seller of the Japanese yen, because of Japan's insistence to raise inflation. The country is running one of the biggest programs in the world to do this and will eventually succeed, he added, suggesting the ProShares UltraShort Yen ETF (YCS) as a way to play. -- Written by Bret Kenwell in Petoskey, Mich. Follow @BretKenwell
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