Skip to content
Opinion
Nir Kaissar

Contrarian Investors Should Love Emerging Markets

Stocks in developing countries are lagging behind those in the U.S. They could be poised to outperform in the coming years.   

The earnings, dividend and valuation equation is shifting in favor of developing countries.

The earnings, dividend and valuation equation is shifting in favor of developing countries.

Photographer: Joel Saget/AFP/Getty Images

Emerging markets get no respect. They account for about two-fifths of global gross domestic product and a quarter of global stocks by market value, and yet they’re a fraction of  most U.S. investors’ stock portfolios. If there’s ever a time to give emerging markets another look, this is it.      

That’s because emerging-market stocks are lagging behind those in the U.S. by the biggest margin in two decades. The last time they were beaten this badly was when a wave of crises in developing countries slammed their stock markets during the late 1990s while dot-com mania lifted U.S. stocks to historic heights.