Things haven’t been looking great for emerging markets in recent days, weeks, and months. After years of dramatic growth, things had slowed down in developing countries across the globe. Policies from the Federal Reserve have exacerbated the situation and turned many away from emerging markets, but some experts think that this is short-sighted.
Some experts, including mutual fund management firm Neuberger Berman, believe that the downturn is temporary and will soon turn back to growth. It should be said that growth is never completely permanent or steady, there will always be ups and downs. The developing world was growing by leaps and bounds before the latest downturn began.
With this being said, not everything looks rosy. For one thing, US currencies and currencies from the developing world are both seen as a risky investment at this moment. Those looking to invest in currency should be going the hard currency route. Both US and international currency issues can be linked to the increased yield being produced by US currency.
The American dollar’s value could be headed too high while other currencies feel like they have been elbowed out by America’s bold financial policy. Given the dominance of the US dollar, many currencies around the world react in a major way when the Federal Reserve modifies tax structures.
So those looking to invest in emerging markets is poised to benefit from the decision, but it’s important to remember that not all investments are created equal. Investors who want to succeed in emerging markets need to be prepared for the long haul.
There is no way to predict that future with perfect accuracy. Even a trusted firm like Neuberger Berman makes mistakes from time to time. But it does seem like things can’t remain the way they are in the developing world for too long.
