Emerging markets set for exciting stock market comeback in 2024!

Last Updated: 11. Januar 2024By

About 20 years ago, Jim O’Neill invented the BRIC concept (Brazil, Russia, India, China) – and gave the following boom of emerging markets a face. The emerging market boom in the 2000s decade benefited from three factors: the commodity supercycle, as the economies in Asia, Latin America, the Middle East, Eastern Europe and Africa were still heavily dependent on their commodity-based economies.

The second factor was turbo globalization. The third factor: the „lost decade“ of industrialized countries – sandwiched between the bursting of the New Economy bubble in 2000/01 and the financial crisis in the US/Europe (2007 to 2009). As a result, capital flowed from industrialized countries to the young markets of emerging markets, whose economies promised more dynamic growth.

Emerging Markets: Comeback after „lost decade“! However, in the last decade, the picture has turned 180 degrees: industrialized countries have celebrated a glorious comeback. In the US, we saw a new technology boom centered around new tech stars like Google, Facebook, Netflix or Apple. Apple was not a new company, but was reinvented by Steve Jobs during the smartphone boom. Europe got a grip on the PIIGS crisis.

On the other hand, the emerging markets experienced their own „lost decade“: China’s growth miracle, driven by massive credit bubbles in the financial and real estate sectors and globalization, imploded. Corruption and political inefficiency paralyzed former economic stars. Commodity prices went through a decade of consolidation.

After China and Russia crises: Selection is key The emerging markets were forgotten, as western investors could make bigger profits in their own markets than in the distant, riskier emerging markets. In fact, the emerging markets have changed significantly: only India and, to a limited extent, Brazil remain from the BRICs.

But if you look at the emerging markets in detail today, you will see an ultra-exciting picture: the emerging markets are working on a massive comeback. It is just happening differently than during the BRIC era. It is other countries that are now becoming interesting. In Eastern Europe, the Russian stock market has been destroyed. But the Polish stock market is trading at all-time highs. I bet you haven’t read that anywhere yet.

China’s stock market is down. But the Indian stock market only knows one direction: upwards. The Vietnamese stock market is trading near its all-time highs. Brazil has now broken its long-term downtrend and thus delivered a massive long-term buy signal! Something is happening in emerging markets. Clever investors will be there in 2024!

Conclusion: A massive emerging market comeback is brewing on the horizon. But this time, selection is key. The traditional emerging market funds are no longer enough, as they are too heavily weighted towards China due to the structure of the MSCI Emerging Markets Index. It is other, new investment opportunities that will offer you the greatest profit potential.