Currency woes and runaway inflation in some countries mask long-term opportunities.
If you’ve been investing in emerging markets stocks, you probably have a bad case of whiplash. After a rip-roaring run in 2017, the MSCI Emerging Markets index fell 17.7% from its peak in late January 2018 through mid September. “There’s certainly a lot of volatility out there,” says Arjun Jayaraman, a manager of Causeway Emerging Markets fund. “And yes, there will be more.”
That’s no reason to run from emerging-markets stocks, though. In fact, it may be a good time to dip in, especially if your portfolio is out of line with your long-term investment plan. Even a moderately risk-tolerant U.S. investor with a 10-year time horizon should have 30% of his or her stock portfolio in foreign shares, and of that, 6% should be devoted to emerging markets stocks, says Joe Martel, a portfolio specialist at T. Rowe Price.
But you need to understand the dynamics at play in these far-flung, volatile and, yes, risky markets.
Rising interest rates and a stronger dollar are a drag on emerging-markets stocks. The Federal Reserve has hiked rates three times since late 2017, with more to come. That makes U.S. assets more attractive, pulling investments away from emerging markets—money that those countries need to fuel economic growth. “The U.S. threw a stone in the water,” says Philip Lawlor, managing director of global markets research at FTSE Russell. “And the ripples are in emerging markets.”
Bu hikaye Kiplinger's Personal Finance dergisinin November 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Giriş Yap
Bu hikaye Kiplinger's Personal Finance dergisinin November 2018 sayısından alınmıştır.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Giriş Yap
MAKING A DIFFERENCE IN THE LIVES OF DISABLED VETERANS
He suffered grave injuries in the line of duty. Now he helps other veterans who have disabilities.
DO YOU NEED UMBRELLA INSURANCE?
A policy can protect you from financially devastating events.
Navigating Finances as a Blended Family
Money matters can get complicated when two families unite. Planning is key.
BREAKING UP WITH YOUR BROKER
Be aware of these challenges when you move your money to a new home.
CHOOSE A MEDICARE PLAN THAT'S RIGHT FOR YOU
Consider your health care needs over the long term as you weigh costs and coverage.
Keep Faith in These Stocks
IN 1997, I coined the phrase “faith-based investing.” It has nothing to do with religion or with picking stocks at random.
OUR ESG PICKS ARE THRIVING
Despite an ongoing backlash, our favorite stocks and funds focused on environmental, social and corporate governance issues had a good year overall.
MONEY MANNERS FOR THE MODERN AGE
The customs for splitting a restaurant check, purchasing a wedding gift, tipping and more have evolved. These guidelines can help.
ELECTION 2024: POLITICS AND YOUR PORTFOLIO
Who wins the White House matters—but only at the margins when it comes to your investments.
YOUR GUIDE TO OPEN ENROLLMENT
With health care costs on the rise, it’s critical to select a plan that fits your needs at the right price.