Will Diversified Emerging Markets continue to have huge returns for the next 5 years?

Question

Looking at a lot of the top performers over the past 5 or even 10 years I see diversifed emerging markets as one of the top performing areas. What are your thoughts on this type of investment over the next 5-10 years?

Answer 1

Emerging markets are feeling the pains of their success, namely overheated economies and inflation.  The BRIC countries will do well, but don't expect the outsize returns we've seen over the last few years.  Russia is still well positioned as is eastern europe.  I'm also bullish on Brazil.  EWZ is a good way to get South American exposure.  Brazil has kept inflation under control and is still growing at a brisk pace.  Mutual funds and institutional investors already know this.  So the valuations are deteriorating.  You may not find many bargains in terms of ADR/ADS shares very soon.

Answer 2

BRIC

Brazil

Russia

India

China

that's the future

Answer 3

Emerging Markets on the whole do well when larger markets are doing well. The larger markets are what fuels the growth of emerging markets, through buyouts, partnerships, etc.

That said, it all depends on exactly which emerging markets you are referring to. Brazil appears to be my favorite in that area along with utilities.

Answer 4

My great grandfather had the same question it the 1920s.

They tend to give good returns until they collapse and you lose all your principal, which is every 10-20 years.