PHILADELPHIA, PA, August 28, 2013 /24-7PressRelease/
-- Recently, investors across the world have looked to so-called "emerging markets" as potential sources of easy money--but all that may change in the near future, according to 1Wealth Partners. The company is hardly alone in thinking so. A recent Quartz report
offers four reasons why emerging markets may be in serious trouble. 1Wealth Partners has responded, with a new statement to the press.
"Those who invest in emerging markets have long known that there are many potential risks," 1Wealth Partners states, in its new press statement. "Now, those risks are becoming realities. Emerging markets are, by definition, unproven and unstable, and as such these new signs of danger come as no great surprise."
As for the Quartz report, it lists four basic reasons why emerging markets may soon be hurting. The first is that emerging market debt is not selling. As Quartz notes, emerging economies have been experiencing a slow-down for a while now, but foreign capital has supported it. Now, that is starting to change; June was the slowest month for emerging market bond sales since the end of 2008.
This, the article continues, puts a squeeze on investment, which is the second danger that emerging markets are facing. All of the foreign money from investors was helping to finance various projects in emerging economies, but now they face higher financing costs and bigger swings in currency. Moody's, the credit rating agency, says the slowdown will prove especially hard in the medium term, for nations that rely on cheap dollars to fund large deficits--among them India and Indonesia.
The bad news does not stop there, either. As Quartz says, "a lot more money could still leave" these emerging economies.
"Over the last decade, investors have pumped trillions of dollars into emerging markets," reports Quartz."So far, they've pulled out only a fraction. In the three months that ended in July, funds that invest in emerging-market stocks saw outflows of $8 billion--less than [2 percent] of the money they manage. Funds that buy dollar debt from emerging markets saw a similar picture, losing just $1 billion this year out of $124 billion. But as emerging markets keep slowing down and developed markets recover, more foreign investors could head for the exits."
The fourth and final danger faced by emerging economies is that central bank reserves are starting to shrink. With foreign capital leaving these emerging markets, their currencies are losing their value, and central banks are responding by spending more foreign dollars to prop them up.
1Wealth Partners notes that its investors are able to generate better returns, via the stock market, than emerging market investors typically do. "We see no need for investors to content with the high volatility and risk of these emerging markets," 1Wealth Partners states.
offers stock market software that provides maximum accuracy and efficiency to corporate and individual stock market traders. The company, 1Wealth Partners, has been in Australia since 2003 and has developed a solid reputation for getting results. Their investment hub is based in Sydney, with offices spread across countries all over the world. The vision of 1Wealth Partners is to partner investors with the technological tools and financial strategies they need to generate consistent stock market revenues, and ultimately to generate lifelong earnings.