How to make money in Emerging Markets
105: Fastest ways to get emerging market exposure
Good morning everyone!
So we lead the week off with Kim Kardashian being charged over $1M for leading on investors in crypto and a shaky Credit Suisse trying to dispel rumors of potential insolvency and CEO troubles.
This week is surely going to be wild from a geo political standpoint so we wanted to cover a financial and markets topic ahead of some more posts this week. This topic is also top of mind for u given how beaten down some of these markets have become during the last two years.
There is opportunity in chaos.
Emerging markets…..
The name sounds sexy but what do you actually know about them?
Maybe you picture exotic jungles in southeast Asia, industrial lines in Russia, or export businesses in South America. Maybe you picture nations rive with civil war or laden with natural resource opportunities and contested elections like Brazil. Maybe you think of the film Lord of War or Blood Diamond or a case study you did on manufacturing in Sri Lanka for a hedge fund interview.
The truth is emerging markets lack singular definitions or qualifications and they offer some of the most difficult operating conditions, geo political implications, and headwinds presently but they also offer investors immense opportunity for profit. Generally the list consists of about 25 countries.
In the nearly 25 years before the Covid 19 Pandemic emerging markets largely outperformed developing nations and economies.
The biggest advantage and facet of emerging market investments is they have the potential for high growth and offer diversification from traditional or developed markets.
If you don’t know or have exposure to emerging markets this will be an excellent 15 minute read to get you up to speed on the basics and the various outlooks that the industry and street have at the moment.
By focusing on emerging markets you will not only be hedging your portfolio from domestic volatility, but you will also be picking some horses in markets that have high sizeable target markets and immature buyers. With some maturation and evolving these markets can be absolute gold mines.
Today we’ll cover:
What are emerging markets?
Risk/Opportunity in emerging markets
How to make money in emerging markets
The goal today is to offer a crash course on what emerging markets are, the risks and opportunities associated with them, and of course, how you make money investing in the long term within emerging markets.
This isn’t a Blackrock, MSCI, or IMF hyper granular overview of emerging markets but by the end of the article you will have a good sense of what emerging markets are, the risk and rewards associated, and be able to get some exposure to them by the end of the day.
Keeping the macro in mind we feel that now is an excellent time to consider upping exposure or moving off zero when it comes to various emerging markets. YOu have to be looking for opportunities when everyone is running around like a chicken with their head cut off and that is certainly the environment at the moment.
We scoured Goldman Sachs Asset Management, Lazard, MSCI, and other institutional outlooks to get some general sentiment for you to chew on while you think about how you want to get involved in these markets.
While most folks are stumbling around trying to time the bottom on the next tech stock, sharp investors are eyeing emerging markets that will shape the coming decades of global economic output and influence through their hyper growth tracks.
These folks could potentially come out on top when the macro conditions ease up, seeing their portfolios sky rocket from exposure to fast expanding consumer, tech, AI, and other sectors within emerging markets.