Just more than a month ago, I recommended buying emerging-market stocks to subscribers of my True Wealth Systems letter…
Readers are up 15% since that recommendation. (I recommended a double-long ETF.)
[ad#Google Adsense 336×280-IA]The important news here is, you haven’t missed out yet – at all.
There’s still plenty of upside potential in emerging markets…
Triple-digit percentage gains are easily possible when emerging markets get going. And right now – after five years of being “dead money” – they’re just getting going again…
In the past five years, emerging markets have been dead money…
The main U.S. stock market index is up 73% over the last five years. But over the same period, the leading emerging-markets fund – the iShares MSCI Emerging Markets Index Fund (EEM) – is actually down in price. Take a look:
The gap really started three years ago… U.S. stocks took off. And emerging markets have completely missed it…
That has made emerging markets incredibly cheap relative to the S&P 500.
They trade for around 26% less than U.S. stocks, based on earnings. And emerging-market stocks pay dividends of around 2.5%… 29% higher than U.S stocks.
Even though emerging markets are a much better deal, most folks aren’t interested in emerging markets today.
Investors are scared of places like China, Russia, and Brazil. Now, after years of underperformance, no one is buying.
So emerging markets are cheap and hated.
Most important to me, just recently, they have entered an uptrend. Those three things are what I hope to see when I enter a trade.
Recently in DailyWealth, I told you about a great way to buy emerging markets… I wrote about the WisdomTree Emerging Markets Equity Income Fund (DEM).
This, to me, is an incredible opportunity. Our total upside potential here is in the triple digits – and you’ll earn 5% in dividends while you wait.
This is a trade you don’t want to miss. If you have new money to put to work… or if you’re looking to allocate money outside of the U.S., DEM should be the first place you start…
Good investing,
Steve
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Source: Daily Wealth