The low U.S. economy can be traced to financial decoupling, which means while worldwide economies are growing, the U.S. economy is more like a dwarf. It isn't growing well. The primary economies that are spiraling upward are those of China, Russia, India, and Brazil. The slowing of our economy has actually paved the road for foreign products to move well worldwide economy.
Just outside of town, the picture is even starker. When you take a trip out to the provinces, it resembles stepping back in time. When you get off the primary highway, there are no paved roadways. Many homes are simple wooden shacks with thatch roofing systems. Naked kids have fun with sticks in the roadway beside ditches that are little more than open sewers. Electricity comes from generators that operate a few hours a day. Health care is practically non-existent. The rice grown in the fields hardly supplies adequate grain for each household's annual requirements.
Not a good move especially this year with the Japan ETF flat as a pancake and Singapore (EWS) up 32%, Hong Kong (EWH) up 19.5%, Sweden (EWD) up 32% and Austria (EWO) up 23%. These country-specific ETF bullets will cost you a slightly higher annual charge but the added versatility is well worth the expense.
Analysts often say that the Chinese and indian stock exchange have actually climbed up too rapidly, and a fall looms. They were right. These markets did crash, but the recovery was fast too. In just a couple of months, the marketplaces re-bounded, reaching nearly their historical highs. It seems that these markets are fundamentally more stable.
Although Africa's economy represent only 2% of world output, it will grow at typical yearly rate of 7% here over the next 20 years (faster than China's) according to Standard Chartered.
Emerging Markets can be divided into three classifications: 1. nations rich in personnels (China, India, Philippines), 2. countries abundant in mineral (countries in Africa, Latin America or Russia), and 3. countries abundant in monetary resource (nations in the Middle-East).
Then there is that financier self-confidence, which is in fact not an excellent indication. Financier belief, constantly really bullish at market tops, and very bearish at market lows, was at extremely bearish levels at the low in early 2009, convinced the market could only go lower. It is now at extreme levels of bullishness and confidence, convinced the market can only go higher. And by many measurements it is at levels at least as high and even higher, than at previous significant market tops, including that of October, 2007.
In summary: We tame the violent moves of EEM using SPX as a trading proxy. Using the exact same market timing and effective finance method that we utilize to trade SPX, we can trade EEM.