2. In order to avoid the fluctuation of inflation rate, banks in emerging markets tend to issue short-term bonds and loans. In contrast, in a market like the United States, the inflation risk is relatively stable, so even about half of housing mortgage loans adopt fixed interest rates, and the term can be up to 30 years.
trait
The first is low investment, high growth and high return. Companies in emerging markets tend to grow faster than similar companies in the west, and the inefficient pricing of emerging market stocks provides the possibility of high returns. The inefficiency of pricing is caused by regulatory obstacles (such as prohibiting insurance companies from entering the market) and the lack of strictly trained securities analysts and speculators.
Secondly, the benefits of diversification. The emergence of emerging markets has expanded the scope of investment choices, making it possible to spread the portfolio around the world.
The third is the characteristics of anti-economic cycle. Because the fiscal and monetary policies implemented by emerging market countries are very different from those of western developed countries, the economic and corporate profit cycles of emerging market countries have low correlation with the stock indexes of western countries, and some even show negative correlation. Therefore, when there is an unfavorable economic cycle in Europe and America, investing in emerging markets can effectively offset the above adverse effects.
Fourth, the market size is generally small. For example, the market value of the entire Philippine stock market is not as large as that of a company in the United States.
Fifth, speculators and investors are mostly chasing up and down. A direct consequence of this investor structure is that the classical western stock valuation techniques are often not suitable for emerging markets, and the pricing of stocks usually depends on investors' emotions.
Sixth, investors in emerging markets are generally immature. For example, in Brazil, investors confuse good companies with good stocks, regardless of price factors; In China, there are also many investors who believe that the cheaper the stock, the more valuable it is. These are all immature manifestations.
Extended data
Development history
First of all, these emerging markets have experienced a short development process before they began to embark on the track of rapid growth. Even since they gained their independence after the Second World War, there were 30 to 40 years in the1980s and1990s.
For example, Latin American countries such as Brazil gained political independence as early as 19 century. As for Russia, its predecessor, the Soviet Union, has a higher level of economic development.
In short, these countries have made some progress in industrial and agricultural production, infrastructure, science and technology, education and other aspects before their rapid economic growth, laying a certain foundation for their rapid development.
Experienced major twists and turns and learned valuable lessons.
Secondly, in the short development process, these countries have made arduous explorations to find the most suitable development path and strategy, during which there are gains and losses.
Many countries have suffered major setbacks in one way or another, such as China's ten-year catastrophe, Latin American countries' ten-year debt crisis and Russian ten-year transition period.
Baidu encyclopedia-? emerging market