Do we take the plunge, or should investors stay away from this high-risk, high –reward proposition?

Are emerging market currency, political, liquidity and economic risks too high?

With various tips from EQR Securities, you can successfully invest and propel in your investment decision while painting a low-risk profile for every investment.

Economic Cycles- Peaks & Troughs

On a country by country basis, economic cycles are an important factor. So far 2021 has not been kind to emerging markets, as developed economies steamrollered ahead on a wave of optimism caused by Covid vaccine roll-outs, leaving emerging markets to fall and stagnate. Currently, the MSCI –IMI index for both developed and emerging market economies is high for the former, and low for the latter. If you can, always buy on a trough.

CIST & Timing

A low price relative to the developed world is a good thing for would be investors in emerging markets. But even if asset prices were currently high in emerging markets, I would still advocate allocating part of your investment portfolio funds towards this part of the world. In particular, China, India, South Korea and Taiwan.

Why?

Simply because now is a historically opportune time to invest in these countries for a variety of reasons. Here are some, but a few for you to mull over.

China

Back in April of this year the IMF forecasted China's economy will grow by 8.4% this year. Even if the IMF's forecast is off by a couple of points, 6.4% is a healthy growth rate relative to the UK, EU, Australia and the USA. Significantly, since China got the Corona virus under control, its economy has flourished and managed to continue like nothing ever happened. Finally, America views China as an economic rival, this alone is a good reason to bet on consistent above average economic growth in the Chinese economy.

India

Demographically, India has a lot going for it in the long-term with a population of 1.4 billion people. Importantly, most of these people are on the slow and long journey away from poverty towards middle class affluence. Not only this, but a quarter of India's population are aged between 10 and 24 years old. By anybody's point of reference, this is a deep employment pool. Additionally, the rating agency, Care, has forecasted India will bounce back by 10.2% , after they have Covid under control.

South Korea

South Korea is a trading nation on the rise and a major technology exporter. It's most significant company is Samsung and during this technological revolution we are all currently living through, I do not see smart phones being replaced with any new cutting edge technology anytime soon. Moreover, I do not expect political turmoil taking place, nor indeed a war with is bordering foe North Korea.

Taiwan

TSMC is Taiwan's largest company and a world leader in the production of semi- conductors. It is one of the most important technology companies on the planet, producing a critical component that powers most modern electronics, including computers, smart phones and cars. Do you envisage a world without these three consumer goods?

Conclusion

Given the positioning of the current emerging market economic cycle, relative to the discount against the world's developed economies, appropriate portfolio allocation should entail the four countries referred to herein. But as always, keep it simple through the appropriate ETF's.

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