Investors are starting to capitulate with foreign emerging markets investments.
In 2009, the story was that emerging markets would obviously do better than the US. There was so much more room for them to grow….and China was buying all our debt. Soon they would own us.
By Mid 2013, the story had changed. Emerging markets had underperformed the US for several years. Now might be a buying opportunity! Valuations looked good.
Now at the beginning of 2014, investors are starting to capitulate. Recommendations are coming out that portfolios should “shave” off some of their emerging markets exposure.
Sound like a familiar story? It is the classic pattern – getting in to0 late, and then giving up too early.
As I wrote in an earlier post, another six months of this and investors will be disgusted with their emerging markets investments. I wonder what will happen then…….