Thursday, March 02, 2006

Emerging Markets: Head for the Hills?

I haven't read the full results of the Morgan Stanley report entitled Head for the Hills but, apparently in their view, emerging markets are poised for a slump, after several years of strong gains.

This is of course, completely contrary to what I recently reported wherein State Street Global Advisors considered emerging markets to be valued similarly to three years ago. Should we rank these varying sentiments according to the number of employees of each has? Morgan Stanley has about 53,000, while State Street has about 20,000.

So give a 2:1 preference ranking to Morgan Stanley? Perhaps not that good a way to resolve this conundrum?

That's the reason we have a brain I suppose (to weigh opposing opinions), and diversification in our portfolios. I suggest, that you not panic and "Head for the Hills" (nice alarmist statement, guaranteed to churn accounts), and simply review your portfolio to see if you are comfortable with your weightings. It's as simple as that ...


The Confused Capitalist

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