Emerging Equity Markets are Not the Emerging Economy

With regard to international, *emerging markets I believe and I’m betting real dollars (Vanguard Emerging Markets Stock Index Fund Investor Shares) that the current happenings in the equity markets does not reflect the true economy. We may have overshot on the high side, but while the fact remains that international, emerging markets are extremely volatile, the sector represents true global growth in the future. My indicator: Cash flow. Companies exist on earnings and profits. Look to their balance sheets and numbers don’t lie (well, let me retract that notion; let’s agree, it’s dependent on who is reporting the numbers…Enron, Lehman, etc.)

As long as you have a long enough window before retirement, my belief is that the market is on sale and it will cyclicly rebound. The $64,000 question is when. But I suppose we’ll all see what transpires three years out…I hope you’re in and not on the sidelines. For me, the game is exciting: I’ll either be smiling, or on the streets. (nah!)

Good luck to you, stay in the game because if this is not the Great Depression, we are going to rally!

*Brasil, South Africa, Russia and of course, my favorite, China. (Check out their more solid solar manufacturing companies…suggestion, not a recommendation to buy.) As an interesting sidenote: Germany is the biggest exporter (41% of GDP); not what I thought: China.

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