When will Emerging Markets have their "Heyday"

[ducky911]

I have 5% in emerging markets (sche)...will it ever go up?

Also have 8% in total foreign (schf)..

I'm not selling or trading just wonder when they will have their turn .

 

[dallas27]

Eventually, and unexpectedly.


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[eta2020]

It does not matter.


You want to have diversified portfolio. Diversification – The Only Free Lunch You’ll Ever Get On Wall Street.

 

[Totoro]

My main index tracker is IWDA, a Vanguard VT clone.

And a week or so ago I allocated 4% to EMIM (Vanguard VWO clone). If it stays subdued I might allocate 4% more.

Rolling the dice ..

 

[JustCurious]

Their heyday will begin on August 3, 2017 and end on May 15, 2024.

 

[Bestwifeever]

Maybe they already had it.

 

[DrRoy]

Eventually, and unexpectedly.

No one can know. I would say that what caused the recent years of weakness is that demand for raw materials, which is what drives much of the EM economies, has been weaker than was expected and prices fell greatly. It will probably take reversal of that situation.

 

[Blueskies123]

If you look at history there have been some long droughts but they were followed by large upturns. I too have been waiting but it could be a while. 1993 to 2003 was 10 years.


http://c3352932.r32.cf0.rackcdn.com/content/pic432ef9e8e18c7ba943d99ff1b6529e1c.png

 

[NW-Bound]

Maybe they already had it.

Somebody mentioned VWO. It's up 13.1% YTD.

Somebody else mentioned raw materials. XLB, a veteran material sector SPDR composed of US companies, is up 12.8% YTD.

 

[gcgang]

If you look at history there have been some long droughts but they were followed by large upturns. I too have been waiting but it could be a while. 1993 to 2003 was 10 years.


http://c3352932.r32.cf0.rackcdn.com/content/pic432ef9e8e18c7ba943d99ff1b6529e1c.png

The classic pennant formation. Chase the breakout/breakdown. Lol.

 

[Totoro]

Any indication on what the P/E actually is? I get confusing results from google search: ranging between 11 and 16.

 

[akck]

It will go up 2 months after you sell in disgust, but not before patting yourself on your back after it slightly drops the day after you sell.

 

[easysurfer]

I used to have an emerging markets fund but no more because 1) too volatile for my liking and 2) since this made up such a small percentage of my portfolio, figured having emerging markets more effort than I wanted.

 

[target2019]

Any year now...

https://www.hennionandwalsh.com/wp-content/uploads/2016/01/2015CallanTable.pdf

EM is always at the extremes, end of year. Either first or last...

All of our new bets have been on EM. That's most new contributions over the last year. YTD, my personal return in 401k contributions to RNWEX, a world fund (sorta) is up over 12%.

In older 401k, EM perofrmance is flat, at best.

When we begin drawing down, our current AA to int'l (DM and EM) will probably ratchet down from 18% to 10-15% overall.

 

[dallas27]

Any year now...

https://www.hennionandwalsh.com/wp-content/uploads/2016/01/2015CallanTable.pdf

EM is always at the extremes, end of year. Either first or last...

All of our new bets have been on EM. That's most new contributions over the last year. YTD, my personal return in 401k contributions to RNWEX, a world fund (sorta) is up over 12%.

In older 401k, EM perofrmance is flat, at best.

When we begin drawing down, our current AA to int'l (DM and EM) will probably ratchet down from 18% to 10-15% overall.

Notice how well emerging does just before major economic recessions, then be careful what you wish for...


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[bradaz2488]

My Emerging & International funds are:
Schwab Taxable Account:
SCHE (2% of AA w/ avg $19.93/share)
SCHF (3% of AA w/ avg $26.43/share)
Fidelity IRA
FPMAX (2% of AA w/ avg $8.44/share)
FSIVX (4% of AA w/ avg $37.30/share)


Been buying on dips the last 2 years and feel pretty good with my avg cost/share, but still lagging compared against the U.S. markets. I hope there is more upside in the next couple of years. With probably buy more on dips to get to 5% Emerging & 10% International. Have questioned my Emerging market allocation given the volatility. Based on historical data will need to actively trade these funds to make money vs. buy and hold.

 

[target2019]

Notice how well emerging does just before major economic recessions, then be careful what you wish for...

If your reasoning is true, then we can expect a few EM 1st place finishes in the nwxt few years' rankings, followed by a U.S. recession.

 

[Totoro]

Any thoughts on how including Chinese stocks will affect this cycle?

 

[Blueskies123]

If your reasoning is true, then we can expect a few EM 1st place finishes in the nwxt few years' rankings, followed by a U.S. recession.

Just remember this is only looking at a tiny slice of historical data. I would not gamble a lot of money on this conclusion. I would want at least 30 years and preferably 100 years of data to make that inference. I also noticed that during this tiny slice of time Barclay's bonds seems to take the opposite position on the table from EM. This kind of makes of sense. EM is very sensitive to interest rates.

 

[target2019]

Just remember this is only looking at a tiny slice of historical data. I would not gamble a lot of money on this conclusion. I would want at least 30 years and preferably 100 years of data to make that inference. I also noticed that during this tiny slice of time Barclay's bonds seems to take the opposite position on the table from EM. This kind of makes of sense. EM is very sensitive to interest rates.

I think that was Dallas' inference. I was restating what was said.

I believe one could go back for thirty years or more of periodic table data, to see what the rankings were, and if there was correlation with recession, interest rate, etc.

Here's 25 years...
https://www.bogleheads.org/wiki/Emerging_markets_index_returns

Since EM had a poor three years previous, I am basically re-balancing by adding new dollars to RNWEX, which is not a strict EM fund.

 

[ziggy29]

If your reasoning is true, then we can expect a few EM 1st place finishes in the nwxt few years' rankings, followed by a U.S. recession.

You never know. EMs were pretty terrible for a few years, relative to the rest of the market, in the late 1990s and even into the dotcom bubble burst in 2000-01.

But around 2003, they exploded. Anyone gradually building a position in EMs from around the 1998-2002 time frame as values kept falling hit a nice windfall in the next five years or so as EMs *way* outperformed almost everything else.

 

[dallas27]

Wow, I made a off-hand comment and you guys are outlining theoretical modeling. Maybe the tealeaves in your cup are being over valued.


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[petershk]

I have 5% in emerging markets (sche)...will it ever go up?

Also have 8% in total foreign (schf)..

I'm not selling or trading just wonder when they will have their turn .

Maybe right after you sell

 

[Markola]

It will go up 2 months after you sell in disgust, but not before patting yourself on your back after it slightly drops the day after you sell.

Ha! Ain't that the truth?

 

[Danmar]

Surely you don't really expect a definitive answer to a question whose answer is unknowable?