If you're buying stocks for gains over the next 10 years or more, you need to imagine the contours of the future. A July report from the United Nations gives a hint. Researchers estimate that practically all population gains through 2050 will occur in developing countries-especially India, which will become number one next year, surpassing China. Nigeria will be third, tied with the United States. Other nations whose population will grow at a good clip are Indonesia, Brazil, Pakistan and Bangladesh.
Of course, population isn't everything. But developed nations have powerful assets in their invested capital, infrastructure and education systems. All I'm saying is that it's foolish to ignore developing economies, especially now.
In 1988, the research firm MSCI launched its Emerging Markets index, with stocks from 10 countries that represented just 0.9% of MSCI's All Country World index. Reflecting the rising importance of developing nations in the global economy and financial markets, the EMI today includes stocks from 24 countries accounting for 12% of the ACWI. Since the end of 2000 through August 31, the EMI has outperformed the ACWI by two percentage points annually, on averagea significant difference.
Lately, it has been a different story. The EMI returned an annual average of just 0.6% for the past five years through August; the ACWI returned 7%, and MSCI's USA index returned. 11.8%. IShares MSCI Emerging Markets, an exchange-traded fund, has declined in five of the past 10 years and is down nearly 20% so far this year. Many emerging markets are suffering higher inflation than the U.S. and Europe. Nigeria recently hit a 17-year high of 19.6%; in Turkey, consumer prices have doubled in three years.
Bu hikaye Kiplinger's Personal Finance dergisinin November 2022 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 2022 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
FREE HELP FOR COLLEGEBOUND STUDENTS
This program’s mentors assist applicants as they fill out the FAFSA, write essays and more.
WHAT YOU SHOULD KNOW ABOUT SPOUSAL IRAS
You typically need earned income to contribute to an individual retirement account, but a spousal IRA provides an important exception to this rule.
SELLING SHARES? HERE'S HOW TO MINIMIZE TAXES ON YOUR GAINS
ET'S say you've been regularly buying shares in a booming tech company over the past few years, but now you want to start taking some of those profits, perhaps to rebalance your portfolio.
Strategies for Novice Investors
AS part of a lifes kills program for young, single mothers, I was asked to teach a class on how to get on top of your finances.
ANSWERS TO YOUR 529 PLAN QUESTIONS
Thanks to recent policy changes, families have more options for what to do with money sitting in these tax-advantaged accounts.
Rate-Cut Winners and Losers
NOW that the Federal Reserve has cracked the interest rate ice, the next development will be to separate winners from losers.
SHOULD YOU BUY THESE RED-HOT FUNDS?
Covered-call ETFs are popular but come with plenty of caveats.
DIVIDEND STOCKS ARE READY TO REBOUND
Our favorite dividend payers are poised to benefit as falling interest rates lure investors back.
IS A 55+ COMMUNITY RIGHT FOR YOU?
These age-restricted developments appeal to older adults seeking abundant amenities and an active lifestyle.
AT LONG LAST, RATES ARE DROPPING
Consider these portfolio moves now that the Federal Reserve has cut its benchmark interest rate.