Commodity Prices, China and "Emerging Markets" ...
Are all in this mornings financial markets news headlines.
Certainly these issues are front and center for their implications on developments for the global economy.
The key question (and there appear to be many opinions on the answer):
Is China in control? Are they being proactive or reactive?
This all remains to be seen, in time.
Emerging economies are getting caught in the fall-out (Chinese Yuan devaluation and equity market sell-off) there is currency, bond and equity market volatility and investors are moving away from that risk as a result.
Ever wondered what the (MSCI) Emerging Markets (Equiy) Index is comprised of?
- Remeber that it is companies, not countries that comprise this index.
- There are 836 mid and large sized companies which are domiciled in 23 different countries:
- Top 15 companies:
click on this table to enlarge
- Many of these companies are recognizeable names.
- Many have a more global scope than the country in which they are domiciled.
- But the importance of owning an "index" is the diversification provided by owning many companies (836 in this case).
So even though "emerging economies" are in the headlines and are struggling in the global economic environment, the companies that are contained in the index may have very diverse sets of circumstances working for and /or against them.
When the indexes are sold as a whole, many very solid companies may be taken lower in price as a result, but in time as value is recognized they will "bounce" back in price as investors uncover the value that was created. This unfortunately, may take time to happen.
So it is important to remember that the purpose of owning this index (or any index for that matter) is for long-term growth and from time to time there may be short-term downward pressure on prices, but that eventually, as the good companies remain solid, they will bring the index back to realistic growth levels.
Today is "Webinar Day" at
We will post a recorded version of it at approx. 5pm (EDT), so feel free to tune in at:
and now that I am on the "bandwagon"
GO JAYS!
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