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Are Emerging Markets the Way to Go?

Some experts say it’s time to ditch Wall Street and Silicon Valley and take advantage of once-in-a-generation opportunities in the emerging markets of Brazil, India and Hong Kong.

Companies in the S&P (US-based) value is double that of emerging markets. That’s the biggest variation ever seen. Are the lower values the bargain of the century for investors?

Currently, there is a strong commodity supercycle.

Brazil is a commodities-strong country; will they take advantage of it? History says it will, but there is volatility. There are ways to minimise the effects of volatility by investing in good companies and using a financial advisor to diversify investments.

India has a massive opportunity, as it has a younger labour force with an average age much lower than that of places like China, the US, the UK, and Europe. It sports a younger, dynamic, tech-savvy population that can take advantage of growth. Is India the market that will produce the most significant growth in the future? Many investors say India is the place to invest right now.

Hong Kong’s valuation is the lowest it’s been since 2009, but it is looking to bounce back.

Logically, the dollar is bound to come down at some stage, and emerging countries are the ones to gain because of that.

Emerging markets have lower valuations and are more volatile because they are more affected by factors like war than established economies. They have a lower value for a reason.

It is, however, predicted that they will catch up in the next five years, so there are bargain opportunities for investors who are not afraid of risk. Emerging markets are said to perform well over the medium term and could be a valuable addition to a portfolio.

Always ensure that your portfolio is diversified to mitigate the risk of losses. Take the advice of a financial advisor before making any investment decisions.

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