The YEAR of EMERGING MARKETS?
Emerging markets stocks are recovering from their November lows, while US stocks $SPX500 are still struggling. Is it finally time to invest in emerging markets? $EEM
We hear this argument about investing in emerging markets every year but over the past ten years, returns have been negative.
Emerging markets are numerous countries, and compared to developed markets, the correlation between the individual countries is lower. Investing in emerging markets means understanding the different individual economies. This requires doing more research and taking bigger margins of safety. Besides, emerging markets are inherently riskier.
Is it time to invest? It should bee for the long-term. While China $MCHI is recovering from the pandemic, there are always geopolitical uncertainties. The same can be said about other countries. The best thing to do is to have diversified exposure and focus on the long-term.