Developed stock markets have really struggled this year. One area that’s been very strong, though, is emerging markets.
As a matter of fact, the average emerging market this year is up 33 percent. The question is, is it too late to get into the market?
Probably not, for two reasons: First, the stocks are still very much off their highs. Last year, they lost 55 percent, compared to 37 percent for the US stock market. Even now, there’s still a long way to go.
The other thing about emerging markets is that they really benefit from an economic recovery. Because they’re producing many of the world’s goods and they’re providing many of the world’s natural resources, when demand starts to pick up – sometime later this year or early next year -- they should really benefit from it.
If you’re going to invest in it, make sure you use an emerging markets mutual fund. Don’t try and pick the hot country out there; go into an overall mutual fund and let the manager of that fund pick which country they think will do best for you.
Although investing in emerging markets is a good idea right now, they’re very risky investments, so make sure you keep it a small part of your portfolio.
