Emerging markets have seen double digit growth for many years now and are constantly out performing the West with their flat lined economies. These power houses have great resources and workforce capacity which operate in pro business environments. There are also great long term factors underpinning EM stocks.
So should we all be rushing into EM stocks as a safe haven for your money in these times of uncertainty?
Definitely not. While Emerging Markets own most of the manufacturing the west owns most of the finance. So when Western institutions need cash to cover loosing bets they pull it out of EM and put it into US dollars. America sneezes and we all catch a cold.
But this can offer opportunities because the true value will out in the end so be patient.
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