To be clear, I don’t think the trend is changing—yet. There are many emerging markets where governance remains effective, where policy is supportive of investment, and where it makes sense to be invested. We do, however, need to be more selective in what we do and not just make broad bets on an asset class. Going forward, investing in emerging markets will be more complicated and difficult than it has been over the past decade or so. As investors, we need to pay attention and to be thoughtful and careful.
Mind you, that should always be the case.
Brad McMillan is the chief investment officer at Commonwealth Financial Network, the nation’s largest privately held independent broker/dealer-RIA. He is the primary spokesperson for Commonwealth’s investment divisions. This post originally appeared on The Independent Market Observer, a daily blog authored by Brad McMillan.