Emerging Markets on a Tear?

The Wall Street Journal has an interesting article in its Money & Investing section today titled "Emerging Markets Go on a Tear." China is one of the countries highlighted, which is now up 47% from its lows late last year.

As shown below, however, China's Shanghai Composite still has a long, long way to go before it makes a dent in the losses it experienced in '07 and '08. As shown, even after its 47% run, the index needs to gain 142% to reach its old highs. From its peak, China is still down 59%. Conversely, the S&P 500 is down 46% from its peak and only needs to gain 84% to reach its old highs. Emerging markets like China have rallied significantly, but since its starting base was so low, its market is still in worse shape than the US.

click to enlarge

Comments

[Fenton Cho:]

Many fine stocks on sale now.

A stock poised for major gains is the online B2B and cloud computing partner of Google China and China Unicom, MYST.OB.

Earnings due shortly.

This company is growing in a big way.

Will show very strong profit with top and bottom line surging revenue when earnings come out.

MYST.OB is a major winner.

Do some DD here:

www.investorvillage.co...

Apr 13 06:46 PM

[Mad Hedge F...:]

My call that the export sensitive BRICK’s were a “Buy” was a total home run, as they massively outperformed the US so far this year. Brazil is up 18%, Russia 29%, India 20%, China 18%, and Korea 20%. The S&P 500 is still down on the year by a miserable 3%. With 80%-90% of the world’s economic growth expected to come from emerging markets over the next ten years, this trade has much, much further to run. If you want to be conservative and diversified, buy the iShares MSCI Emerging Market basket ETF (EEM), up 21% on the year.

Apr 13 09:51 PM

[quick:]

I like VWO as a long term hold in an IRA or something rather than EEM. Much smaller expense ratio.

Apr 14 03:53 PM

[epicure:]

I agree better buy than EEM

Apr 14 04:36 PM

[Fund Insider:]

What about Korea and mideast situations ?
Nobody worred that you are buying in part into some very volatile
areas of the world in a EM index fund ?

Apr 14 04:53 PM

[mkreisel:]

I think it's about time to short EEM, EWY, EWZ, and FXI.

Apr 16 05:17 AM