Good Wednesday, hope your week has been productive.
Today | 9 items
1. Chart of the day
2. Investors are pulling out of emerging markets
Overseas funds are pulling out of six major Asian emerging equity markets at a pace unseen since the global financial crisis of 2008 — withdrawing $19 billion from India, Indonesia, the Philippines, South Korea, Taiwan, and Thailand so far this year, according to data compiled by Bloomberg.
Why are they pulling money out?
Investing in emerging economies is considered riskier than investing in U.S. stocks.
Since interest rates in the U.S have been near zero since the financial crisis, investors have looked to other countries for better investment returns.
The Fed (federal reserve) has started raising interest rates. In doing so, its attracted money back to the U.S and away from emerging economies.
In addition, investors are worried that trade disputes and tariffs could have a negative effect on Asian economies.
Should you be a buyer?
It depends on your investment objectives. Here are two questions to ask:
• Are emerging markets currently a part of your allocation?
• Emerging markets carry a higher degree of risk. Can you accept the greater potential return for greater volatility?