Last week, the Wall Street Journal proclaimed that “emerging markets are having a banner year.” And I can’t disagree, but we didn’t start 2017 with extreme optimism.
In preparation for this quarter’s outlook, I went back to revisit my earlier blog posts. A lack of direction around U.S. policies and trade issues dominated the conversation, and “uncertainty” and “challenges” were two terms I repeatedly used—along with “cautiously optimistic.”
The turbulence cleared starting in the second quarter. Gross domestic product improved in many emerging countries, lower inflation resulted in lower interest rates, and fiscal discipline led to improving performance. A lot can change over the course of one year. That keeps me hopeful, but I know the tide can turn quickly, which is why we’re always vigilant.
This leads to the question of what, if anything, worries me about the future performance of emerging markets. Find out in the video below.
International investing involves special risks, such as political instability and currency fluctuations. Investing in emerging markets may accentuate these risks.
The opinions expressed are those of Patricia Ribeiro and are no guarantee of the future performance of any American Century Investments fund.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.