Emerging Markets - Tilted Forum Project Discussion Community

jimk · 11-13-2009, 11:31 AM

There have been scads of articles recently on how the emerging economies have led the way out of the global economic ditch, and will continue to do so for the next few years. These smaller markets, especially the BRIC (Brazil, Russia, India, China), really have been a moonshot up, but the conspiracy theorist in me is worried that the reason we're hearing so much about it now is because Goldman et al. are already long & looking for counterparties to sell to so they can bank their next billion$.

I trade the EEM (Emerging Markets ETF) all day, every day, so I'm stuck in the trees......eager to hear if some of you can see the forest.

Baraka_Guru · 12-09-2009, 07:56 PM

Well the Canadian perspective is that economic zones such as BRIC are essential to our economic recovery, since we export a high volume of resources to developing economies. The challenge for us right now is that our dollar is really strong, so our exports are pricey at the moment.

We might be hearing more about these nations now, considering how the economies of developed nations are in the tubes, but in certain circles they've been saying generally the same things about them. They are ripe for opportunities based on their rates of expansion.

It was recently reported that India's GDP grew by 7.9 percent. This was ahead of a forecast of 6.3. But with the world economy as it is, developed nations would have been happy with a fifth of that.

new man · 12-10-2009, 08:43 AM

My personal view is that the emerging markets are very important to my portfolio for a couple of reasons.

One is that these countries are making much of our cheap imports. So rather than our money flowing out to enrich them, let's own the companies over there so profits come back as dividends for us.

Also, foreign investments act as a hedge against the devaluation of the dollar. If our dollar loses value against other currencies, then we get more dollars back from dividends after currency exchange.

If you are rebalancing your portfolio regularly, then you are not letting your exposure get too big, so profit from the EM are spread back to your other, less volatile holdings.

11-13-2009, 11:31 AM	#1 (permalink)
jimk Addict Location: Chicago	Emerging Markets There have been scads of articles recently on how the emerging economies have led the way out of the global economic ditch, and will continue to do so for the next few years. These smaller markets, especially the BRIC (Brazil, Russia, India, China), really have been a moonshot up, but the conspiracy theorist in me is worried that the reason we're hearing so much about it now is because Goldman et al. are already long & looking for counterparties to sell to so they can bank their next billion$. I trade the EEM (Emerging Markets ETF) all day, every day, so I'm stuck in the trees......eager to hear if some of you can see the forest. __________________ raw power is a guaranteed o.d. raw power is a laughin' at you & me -iggy

12-09-2009, 07:56 PM	#2 (permalink)
Baraka_Guru warrior bodhisattva Super Moderator Location: East-central Canada	Well the Canadian perspective is that economic zones such as BRIC are essential to our economic recovery, since we export a high volume of resources to developing economies. The challenge for us right now is that our dollar is really strong, so our exports are pricey at the moment. We might be hearing more about these nations now, considering how the economies of developed nations are in the tubes, but in certain circles they've been saying generally the same things about them. They are ripe for opportunities based on their rates of expansion. It was recently reported that India's GDP grew by 7.9 percent. This was ahead of a forecast of 6.3. But with the world economy as it is, developed nations would have been happy with a fifth of that. __________________ Knowing that death is certain and that the time of death is uncertain, what's the most important thing? —Bhikkhuni Pema Chödrön Humankind cannot bear very much reality. —From "Burnt Norton," Four Quartets (1936), T. S. Eliot

12-10-2009, 08:43 AM	#3 (permalink)
new man Banned	My personal view is that the emerging markets are very important to my portfolio for a couple of reasons. One is that these countries are making much of our cheap imports. So rather than our money flowing out to enrich them, let's own the companies over there so profits come back as dividends for us. Also, foreign investments act as a hedge against the devaluation of the dollar. If our dollar loses value against other currencies, then we get more dollars back from dividends after currency exchange. If you are rebalancing your portfolio regularly, then you are not letting your exposure get too big, so profit from the EM are spread back to your other, less volatile holdings.