Morgan Stanley analysts expect emerging markets to outperform in 2019 with a base case forecast of 8% price return for MSCI EM index. Based on the earning growth prospects for the MSCI EM index, it compares favorably with the S&P500 index, standing at 10+% and 6+% respectively. However, historical data has shown that over the last 6 years the Y-O-Y earnings growth is 0. This goes to show that investing in EM is a long term strategy for investors with a high risk tolerance to be able to ride out the high volatility of the em equities market.
Year-Over-Year Earning Per Share Growth for MSCI Emerging Markets Index, Bloomberg Data
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Nobody, including finance professionals, can robustly predict the stock market developments neither short-term nor long-term. EM are very risky. I attach 10 price chart of 3 large EM ETFs versus SP500.
more on my thinking: https://seedly.sg/questions/what-is-your-general-investing-philosophy-strategy
Investing in EMs can give you a more diversified portfolio if you are heavily invested into develope...
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