facebookEmerging market stocks are cheaper than US stocks now but it looks enticing as a long-term investment. Should i add more emerging markets to my portfolio? - Seedly
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Anonymous

09 Feb 2020

Emerging market stocks are cheaper than US stocks now but it looks enticing as a long-term investment. Should i add more emerging markets to my portfolio?

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    What are your thoughts?

    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

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        Isaac Chan

        Isaac Chan

        13 Mar 2019

        Level 11ยทBusiness at NUS

        Investing in EMs can give you a more diversified portfolio if you are heavily invested into develope...

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