DEHP - The Case For Emerging Markets

2024-01-29 21:47:29 ET

Summary

• Overseas markets, particularly emerging markets, are expected to offer the best stock returns over the next decade.
• EM stocks trade at historically low valuations compared to the US and other international stocks.
• EM stocks have historically outperformed developed markets over the long run and are expected to continue doing so.

The Best Stock Returns Over the Next Decade

Looking across the world and attempting to forecast expected returns over the next decade, I believe the best expected returns are found overseas. A recent analysis from Goldman Sachs shows that by 2075, China and India may be the two largest economies in the world. Long-term investors choosing to not invest in these regions while they are historically cheap, and instead pouring money into highly overvalued US indices is a mistake in my view. Now is the time to consider rebalancing into international markets. I reviewed the case against U.S. markets and for international stocks . Now I turn to why I believe the emerging markets offer investors a long-term opportunity to prosper....

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