Those Emerging Markets Will Keep On Emerging...

Everyone knows that stock markets in developing nations were white-hot last year, but the question now plaguing investors--in light of recent sharp declines--is whether their appeal will wane. The answer suggested by a new study of global equity flows by economists Michael J. Howell and Angela Cozzini of Baring Securities Ltd. is no. "We can expect cyclical corrections in emerging-market stocks," says Cozzini, "but the long-term direction is up."

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