Google the question “Is it time to buy emerging markets (EM) in 2019?” and a cavalcade of experts appear espousing EM. Do the same for 2018 and you find another herd of EM bulls.
Those who followed that advice in 2018 were burned as markets fretted about China’s slowing growth and the escalating US-China trade war. The MSCI Emerging Markets Index – the key barometer for EM equities – shed almost 15% in 2018 in US-dollar terms.
There is reason to be more optimistic on EM this year, but taking a short-term view is speculation. And basing that view solely on hard-to-predict factors – for example, US dollar strength or the outlook for Chinese economic growth – is a wealth destroyer.