29 Nov Oliver's Insights – A (slightly) different cycle – the ascent of the emerging world
This note looks as the increase in the importance of emerging countries in the global economy and what this means for the economic/investment cycle and investors.
The key points are as follows:
– No matter how much economic and investment issues change, there will always be a cycle. In other words, history may not repeat but it does rhyme.
– However, the constrained outlook for the US and other developed countries and the relatively strong outlook for emerging countries, along with the emerging world becoming a greater proportion of global gross domestic product (GDP) than the developed world, make this cycle a bit different.
– This has significant implications for investors, pointing to a strategic bias towards emerging markets/Asian shares, commodities and Australian shares.
– It also suggests the next big asset bubble may be in emerging markets or related themes – but it has a long way to go yet.