By John DeGoey, CFP, CIM
Special to the Financial Independence Hub
Pretty much every serious investor has a favourite investment thesis or theme that they employ. Many of these are mainstream, which, by, definition, means that a number of people do something similar. One such theme is to invest disproportionately in either dividend paying stocks or stocks that have a history of raising dividends. Some people like to invest in the so-called FAANG stocks. Some people like to speculate and call it ‘investing’ by putting large percentages of their assets into new ideas like cannabis stocks. The point is that there are different strokes for different folks and that virtually everyone can justify their own peculiarities. People seldom resist their own ideas.
I’m like most people. For a generation now, I have been pounding my fist on the table about the need to address what I see as a chronic under-investment in emerging market equities. To me, this asset class makes sense from virtually every meaningful perspective: historical risk, expected return, co-variance, current valuation, prognosis for growth… you name it.
In a world where overall GDP growth is anemic and not likely to improve materially in our lifetimes, emerging economies are the only ones where economic (specifically, GDP) growth remains strong. These are rapidly industrializing countries which are mostly stable politically, young and full of ambitious strivers who want access to a more western way of life. Many people are of the viewpoint that the key to a growing economy is a growing middle class. There are far more people entering middle class status in emerging economies than anywhere else. Continue Reading…