Investment Options: Emerging Market Stocks
Driven by growth in countries like China and Brazil over the last few decades, Emerging Market (EM) stocks have grown from representing less than 1% to now over 10% of the world's stock market value. It has been a dramatic shift, yet many US investors tend to own very little to no EM stock investments.
With today's endless menu of low-cost Emerging Market stock funds, there's very little reason to keep them out of your strategic portfolio. Once you decide to include them, the tough decision is selecting a fund to use.
As with other asset classes, I prefer index funds and ETFs that hold hundreds of stocks instead of buying individual stocks directly -- keeping costs low and diversifying as much as possible. With EM stocks, this really is the only viable option since buying individual stocks is unrealistic for the average investor.
Here are some of my basic requirements when selecting an investment for a given asset class:
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