Stay Away From Emerging Markets
Igor Manukhov - Jan 26, 2024
Stay away from emerging markets for now.
Going through my charts this week, I wanted to share with you an interesting observation. Emerging markets have been really underperforming global developed markets and do not look like a very attractive place to invest.
Take a look at charts below.
Black line at the bottom represents a price chart of ETF that tracks emerging market equities. It is doing OK.. Things fall apart when we compare this ETF to other markets. Take a look at relative strength lines.
• Red line – relative strength of Emerging markets vs US stocks
• Green line – relative strength of Emerging Markets vs Canadian stocks
• Pink line – relative strength of Emerging Markets vs International developed markets.
All three relative strength lines are pointing down, meaning that emerging market equities are underperforming all other major equity markets. I would stay away from them until this trend changes.
