In 2009, 2012 and 2017, emerging market stocks offered the best returns of any asset class.
Many investors overweighted their portfolios in this sector.
Is that a responsible and intelligent way to invest?
In 2010, emerging markets stocks came in second. Not bad.
In 2013, they came in dead last. Not good.
In 2018, they again came in dead last. Really bad.
It’s impossible to predict which asset classes will outperform in any year.
Could you have predicted U.S. bonds would beat the returns of every asset class of stocks in 2011?
You could get lucky, and pick a winner.
But over time, you’re likely to be a loser.
Here’s a better way. Capture the returns of the global stock and bond markets by buying low-management fee index funds.