As the Federal Reserve gets set to end its massive multi-year stimulus program, emerging markets are shuddering. That’s because the possibility of imminent Fed “tapering” is leading many investors to yank their money out of emerging-market stocks and bonds and placing them in higher-yielding U.S. bonds. I recently wrote about the burgeoning appeal of emerging-market stocks, which are currently in turmoil but starting to look like deep value plays for long-term investors. Still, until… Read More
As the Federal Reserve gets set to end its massive multi-year stimulus program, emerging markets are shuddering. That’s because the possibility of imminent Fed “tapering” is leading many investors to yank their money out of emerging-market stocks and bonds and placing them in higher-yielding U.S. bonds. I recently wrote about the burgeoning appeal of emerging-market stocks, which are currently in turmoil but starting to look like deep value plays for long-term investors. Still, until these markets settle down and form a bottom, it’s wiser to nibble than go whole hog.#-ad_banner-# Yet when it comes to emerging-market bonds, there is a different set of factors to consider. They are interrelated and can help determine which bonds are safe — and which are potentially toxic. Those three factors: trade balances, foreign currency reserves and currency changes. Let’s take a closer look. Surplus Or Deficit? A nation’s trade balance… Read More