Steer clear of emerging markets: Wall Street

Steer clear of emerging markets: Wall Street

Steer clear of emerging markets: Wall Street

The MSCI Emerging Markets index recently hit its lowest point in four-months as manufacturing and services suffered in China. This index is down 3 per cent compared to a 1.1 per cent drop in the developed-market index.

Diminished exports are also contributing to the slowdown in developing economies. In November, Canada alone saw a 3.6 per cent decline ($13.5 billion) in imports and a two per cent decline ($9.8 billion) in exports from countries other than the U.S, according to Statistics Canada. Canada's trade deficit with countries other than the U.S. fell to $3.7 billion in November from $4 billion in October.

Despite the stats, an Ontario advisor believes that relying on market predictions is short-sighted when building a client’s portfolio.

“The three most crucial factors when investing are risk management, establishing a reasonable benchmark to measure your performance … and keeping costs reasonable,” said advisor Doug McCaw, managing director of Stonegate Private Counsel. “Unfortunately, a lot of broker organizations focus on market timing, which history has proven is not the way to build and sustain a portfolio.”

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