Ask people in the street what they know about investing in emerging markets, and they’ll probably say something like this…
Emerging markets are volatile. They tend to be crisis-prone. And when crisis strikes, it usually spreads.
But having some exposure to emerging markets is important because, over the long term, emerging market shares outperform shares in developed markets.
All those statements sound about right.
But that’s because investors have very short memories.
When you actually study the data from 1900 onwards in detail, as Professor Paul Marsh has done, you’ll know the truth is rather more complex.