Though international markets, especially the emerging ones, are expected to grow, some experts warn of risks and expanding bubbles that could form in emerging market exchange traded funds (ETFs).
Manny Mashhoud, 46-year-old insurance executive, fears that high unemployment and lingering effects of the recession may still be felt in years to come in the U.S. markets, writes Walter Hamilton for The Chicago Tribune. Seeking other investment opportunities, Mashhoud found that “the advantages of the foreign markets substantially outweigh what we have here.”
Most financial advisors share Mashhoud’s sentiments, believing that many international economies will likely move out of the recession faster than the United States. Currently, emerging market stocks have surpassed the performance of key U.S. indexes.
Still, investing in emerging markets doesn’t come without risks. Recent events have revealed that steep losses can be triggered by events anywhere in the world. [How to spot and avoid ETF bubbles.]