Without a doubt, the value of stocks in emerging markets has had a rough time this year. In fact, since many of these stocks decreased in value during the first half of the year, many investors are wary about continuing to invest in these stocks. Not surprisingly then, many experts state that the buying time for emerging market stocks are now over. Why?
They state that countries such as China, Brazil and India are taking a longer than expected time to convert to consumer-driven economies. Another reason cited is that the US Federal Reserve practice of buying bonds will soon be over. Moreover, some established companies in emerging market countries are already trading at high prices and thus, are not attractive investments at the present moment.
All that said, other experts believe that investors should look at emerging market investing as a more long term prospect. Further, they also state that all emerging market investments should not be considered equal, but instead should be viewed for the diverse investment opportunities that they in fact are. In essence, they still believe that certain emerging market stocks are still attractive as these stocks can increase in value significantly more than stocks from already developed countries.
Many of these professionals now endorse frontier markets that include countries such as Saudi Arabia, United Arab Emirates, Vietnam, and Pakistan. Frontier markets, themselves, include countries that are still underdeveloped and possess a high potential for economic growth.
Meanwhile, many experts are quite cautious about investing in emerging markets in countries that include Indonesia, Brazil, India, South Africa and Turkey. In recent times, these countries have suffered from increasing labor expenses, unstable currencies, and less than stellar economic and export growth. However, it is important to note that these five countries will be holding elections soon and there is still a chance that their economies will improve significantly.
