Friday, May 23, 2014

Good and bad markets all can get affected by one another


Discrimination and differentiation goes away when there is a risk-off environment and everybody is lumping emerging markets together. 

So unfortunately, even the ones with the better fundamentals get affected by those concerns with weaker fundamentals. 

We have seen this general contagion in emerging markets last year with the taper tantrum and earlier this year when there was a period of risk-off following the troubles with Argentina and a number of other emerging markets in late January, early February.