SG Talk

If you bought an emerging market fund in 2004.
You beat the S&P500 for 15yrs until 2019...then the S&P500 catch up and went above.

If you look at the chart the emerging market was so strong within 3yrs 2004-2007 it achieved the returns of s&p500 for next 15yrs!

However if you bought after 2006 your return is zero for next 15yrs.

what does this tell us about long term investing 

1. When market runs up quickly it "eats" the returns of the future and future returns fall.

2. When investing long term look for markets that did not run up too fast above its long term rate of return.

3. Market categories big caps vs small caps. Emerging markets vs USA. ...growth vs value...are like fashion they move in and out of fashion. In the end things regress to the mean. 

What do you think of Thailand stock market....probably not very interesting vs US markets.

Look at the chart below. The dark line is Thai index and the lighter one S&P500.

The Thai market has many periods of outperformances very S&P500.

Only last 3 yrs it performed badly due to the politics and interest rate hikes.



What does this tell you?

Recently many pundits like Mr Loo and Adam Khoo promote US stocks and cheer US stock. They may be unaware that the good performance of US market is a recent even of last 5-6yrs. Historically there is nothing special about US market it is a mature economy and there are many markets that are starting at lower bases that have domestic companies that can grow more easily.

This is my finding after looking at longer periods and markets across the world