Unlike the S&P 500, the MSCI Emerging Markets index has yet to reclaim its 2007 peak. Emerging markets can fall harder than developed in risk-off bouts, but they can also outperform when the global economy is humming.
"Emerging markets had a nice run that started in early 2009 and lasted up until the summer of 2011. Then the market started worrying about a Greek default and the Eurozone credit crisis, which threw a curveball to emerging markets," Yorke said.
As a group, developing markets are way behind the S&P 500 this year but have made up lost ground since the end of August.
"Emerging markets have never been known for their lack of volatility, but they're a box you want to check on your overall asset allocation" Yorke said. "There will be periods of underperformance when emerging markets are out of favor, but they're still an important part of a global diversified portfolio."The good news is that emerging markets are offering more attractive valuations after lagging the S&P 500 for so long. Other positive fundamental factors for developing markets include higher economic growth rates combined with rising consumption and a middle class, Yorke said. Photo Credit:aashek DISCLAIMER: All investments involve risk and various investment strategies will not always be profitable. International investing involves special risks, such as political instability and currency fluctuations. Past performance does not guarantee future results.
The post Don’t give up on emerging markets – Yorke appeared first on Smarter Investing
Covestor Ltd. is a registered investment advisor. Covestor licenses investment strategies from its Model Managers to establish investment models. The commentary here is provided as general and impersonal information and should not be construed as recommendations or advice. Information from Model Managers and third-party sources deemed to be reliable but not guaranteed. Past performance is no guarantee of future results. Transaction histories for Covestor models available upon request. Additional important disclosures available at http://site.covestor.com/help/disclosures. For information about Covestor and its services, go to http://covestor.com or contact Covestor Client Services at (866) 825-3005, x703.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV