Some Thoughts On Emerging Markets

Emerging Markets have been performing awfully lately. And by lately, I mean the last six years in which little progress has been made. To make matters worse, there was a huge opportunity cost of having capital allocated away from U.S. equities.

spy eem

After six years of sideways movement, Emerging Markets are beginning to really move again, only in the wrong direction. Take a look at July’s performance, courtesy of Dimensional Funds. You’ll notice virtually no country was spared.

country

Neither was any size or style.

size

Or sector.

other

So what do we do now with Emerging Markets? That obviously depends on what sort of investor you are, what your holding period is and all the other usual caveats. For investors committed to a diversified portfolio, understand that you’ll never hold enough of what’s going up and you’ll always hold too much of what’s going down. For broadly diversified portfolios, dealing with a lousy investment is a feature, not a bug.

Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.

What's been said:

Discussions found on the web
  1. 10 Friday AM Reads | The Big Picture commented on Aug 14

    […] Thoughts On “Awful” Emerging Markets (Irrelevant Investor) see also How two of history’s greatest investors deal with losses (Reformed Broker) • 3 […]