Since the start of 2014, investors have fretted over emerging markets. And they should. Early in this economic recovery, investorsrepelled by low returns in the developed world leaped for the stocks and bonds of emerging markets, whose markets promised faster growth.
In 2009 and 2010, emerging economies grew much faster than the U.S. did; stock prices rose 46 percent annually, more than twice the gains of U.S. equities. Hot money flowed in, but so did foreign direct investment, which is harder to extract. Last year, foreign direct investment in the developing world grew 6 percent, to a record $759 billion, or 52 percent of the global total.