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Editor's note: The markets will be closed tomorrow in observance of Good Friday. Your next issue of DailyWealth will arrive in your inbox on Saturday. Enjoy the holiday.
Thursday, April 13, 2017
I will cut right to it today...
The last time we saw this setup, emerging market stocks soared 400%, crushing the returns on U.S. stocks.
Now, we're seeing this setup again. And I expect history will repeat – and emerging market stocks will dramatically outperform U.S. stocks in the next few years.
Let me explain what's going on...
Emerging market stocks have massively underperformed U.S. stocks – for a very long time...
Stocks in the U.S. have soared in the last seven years. Meanwhile, stocks in emerging markets have literally gone nowhere.
Look at the chart below, and you'll see what I mean:
In seven years, U.S. stocks have more than doubled... while emerging markets stayed flat.
We've seen this type of dramatic underperformance before. The last time emerging markets underperformed for at least four consecutive years was 1995 through 1998. You can guess what happened next...
Emerging markets went up 64% in 1999. They went on to soar by more than 400% during the mid-2000s... And they outperformed the U.S. market for 10 of the next 12 years.
Could we see a similar path today? Absolutely. It's already happening...
Emerging market stocks have outperformed U.S. stocks by 11 percentage points since their January 2016 bottom.
That outperformance over the last year isn't a full reversal of the past five-plus years... But it's a start.
If you're a longtime reader, then you know that's exactly what I want to see – the start of an uptrend.
In short, buying emerging markets after years of underperformance has led to incredible returns in the past. I expect we will see incredible returns from emerging markets again, starting right now...
I urge you to take advantage of it!
P.S. Join me in China this summer to see the opportunity in emerging markets for yourself. We've lined up an incredible group of expert speakers for our 2017 Asia Opportunities Conference Series, where we'll discuss the most lucrative opportunities in Asia with some of the most exclusive analysts in the field. You ought to consider joining us... It will be a fantastic trip! I hope to see you there... Click here for the details.
"When emerging markets are hot, you simply HAVE to be on board," Steve writes. Emerging markets have gone nowhere during the last seven years. But that's changing... And based on history, we could see hundreds-of-percent gains in the next few years. Learn more here: The Next Emerging Markets Boom Is Here.
"The center of economic and market gravity has long been shifting toward the East," Kim Iskyan writes. One country is on a tear today, rapidly outstripping Western economies. Learn why it could soon have the world's largest stock market, right here: This 'Emerging Market' Is About to Take Over the World.
INSIDERS KNOW THEIR BUSINESSES BEST
Today's chart showcases the recent strength in a commercial real estate stock...
Gladstone Commercial (GOOD) is a real estate investment trust ("REIT"). The company invests in and owns leased industrial, commercial, and retail real estate. It also makes select long-term mortgage loans. But more important, the president of Gladstone – Robert Cutlip – has been scooping up shares of the company for years...
Cutlip has bought shares nearly every month since April 2014. Today, he holds about $720,000 worth. Insider transactions like this offer great insight into how management thinks a company's shares are valued. Insiders sell their holdings for a variety of reasons... Maybe they have a big tax bill to pay, or maybe they want to buy another mansion. But they only buy for one reason: They think shares are cheap.
As you can see, GOOD shares are in a steady uptrend and just hit a new high. But if the recent activity from management is any indication, the stock is likely to continue higher...