Читать книгу The Emerging Markets Handbook - Pran Tiku - Страница 9

Many investors continue to ask why it’s necessary (or desirable) to take on an extra layer of risk in a world far removed from their daily lives.

The fact is that by all objective measures the average investor is seriously under-invested in emerging markets. Ironically, in the name of playing it safe an entire generation of investors continues to forgo the regions that offer the greatest potential for growth and profit. Some of this is grounded in what has been widely recognised as homeward bias. It’s also referred to as the devil you know theory.

As the global economy becomes ever more interconnected, the growth rates of emerging markets are poised to far exceed those of the developed world – mainly the United States, Europe and Japan, which are regions currently burdened by excessive debts and deficits. Substantial academic research strongly suggests that investors are better off diversifying their investments globally and not chasing returns based on the most recent performances. The real risk, therefore, is continuing to invest with the herd based on outdated theories and strategies.