Emerging Markets

[Spanky]

Most experts recommend 5% be allocated to emerging markets. Despite its recent runup, the overall return is dismal over the last 10 years. Are the experts expecting this is the turning point or simply it is another way to add more diversification?

 

[wildcat]

My guess is diversification. From what I know emerging markets have one of the lowest + correl with the US stocks when comparing it to other equity investments. I believe the index is trading above historical highs in terms of valuation but I suppose some could argue that this is where the growth will be in the future. If you maintain a small long-term position you might see the benefits of both.