U.S. Markets are sitting close to historical highs driven by good economic data. U.S. real GDP for the second quarter is at 4.2% on a seasonally adjusted annual basis, job numbers are strong, and inflation seems to continue to be in check. Earlier this week Robert Luna, Surevest CEO & Chief Investment Strategist, was on TD Ameritrade Network discussing the U.S. markets and other areas where he sees great investment opportunity in Emerging Markets.
The MSCI Emerging Markets Index is in bear market territory and many people are now shying away and questioning having exposure to this asset class. However, Robert thinks this is not the time to sell. “If you are a long-term investor, looking out over the next two to three years, this is where you have to step in and buy these type of investments” said Robert when referring to Emerging Markets.
Looking at historical figures, it can be seen why Robert makes the case to stay the course and buy on the dips. Over the last 10 years, the best returns for Emerging Markets have come after the largest yearly drawdown (the High minus Low for the year).
As can be seen, the average returns after the biggest drawdown has provided attractive returns. Six months and 12 months after the biggest yearly drawdown has on average been followed by a 20.6% and 32.15% return respectively. Past historical returns are not a guarantee of future results.
Listen in to Robert’s interview to hear what investments within Emerging Markets make good sense in the current investment environment.
 Source: Bloomberg 2018