Mar 24, 201508:23 AMFinancial Perspectives
with Michael Dubis, CFP
The long-term case for emerging markets
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That said, there are risks involved in investing in any country in the world. Liquidity (or rather, the lack of liquidity) also plays a large part in volatility, particularly in emerging markets. If there aren’t enough participants in the market and liquidity dries up, that can dramatically intensify a market correction. All markets have faced corrections, though. We cannot predict when the next correction will occur in any particular market, and if you invest in stocks, whether you know it or not, you are accepting that market volatility is simply a fact of investing life. (Note: if you don’t accept this truth, you will likely fail miserably at investing.)
Emerging markets are certainly not a short-term investment. But neither are developed markets like the U.S. As the historical evidence suggests, emerging markets are worth considering even in small doses, even if it may take more than a decade to see the value. Some folks don’t like waiting that long. That’s okay, but remember: the historical evidence suggests that all stock investments face similar issues and cycles. Spreading the equity risks around the globe seems like a sensible strategy.
Michael Dubis is a fee-only certified financial planner and president of Michael A. Dubis Financial Planning, LLC. He is a former adjunct lecturer at the University of Wisconsin Business School James A. Graaskamp Center for Real Estate. Mike can be reached at firstname.lastname@example.org. This article contains the opinions of the author. The opinion of the author is subject to change without notice. All materials presented are compiled from sources believed to be reliable and current, but accuracy cannot be guaranteed. This article is distributed for educational purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, products or services described in this website or that of the author’s. Mike Dubis does not guarantee the relevancy, appropriateness, or accuracy of any outside information or links. Mike Dubis does not render or offer to render personalized investment advice or financial planning advice through this medium. All references that might be made to an investment or portfolio's performance are based on historical data and one should not assume that this performance will continue in the future. THIS COMMUNICIATION MAY NOT BE USED BY YOU AS A RELIANCE OPINION WITH RESPECT TO ANY FEDERAL TAX ISSUE DISCUSSED HEREIN AND IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED, BY YOU FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED ON YOU BY THE INTERNAL REVENUE SERVICE.
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