It's that time when Wall Street sets out its big ideas for the coming year. And the verdict is in. For 2021, emerging markets are the place to be. Bank of America recently surveyed fund managers collectively holding $526 billion in assets. More than half of leading fund managers interviewed indicated emerging markets - after a decade in the doghouse - are their favorite asset class for the coming year. As if on cue, the MSCI Emerging Markets Index shot up nearly 13% in November. Emerging markets equity funds attracted almost $14 billion in the last two weeks of November. Emerging markets specialist Renaissance Capital was almost exuberant when it advised investors "to buy anything and everything" in emerging markets. Emerging Markets: The Redheaded Stepchild of InvestingI earned my investment spurs managing emerging markets investment funds. But if you're an average U.S. investor, you probably don't even think about emerging markets. With the uncertainty surrounding the global pandemic, emerging markets may be the last place in the world you'd want to put your money right now. But it wasn't always so. In fact, between 2003 and 2007, emerging markets were the top-performing asset class in the world. Consecutive annual returns of 55.8%, 25.6%, 34.0%, 32.2% and 39.4% over those five years were enough to turn a $10,000 investment into $48,304. Much like technology stocks do today. Emerging markets represented the future and offered the single best way to make your investing fortune. Alas, emerging markets have lagged the U.S. markets badly since then. But experienced investors know that it's always the most hated and ignored asset class that offers the greatest potential upside. Emerging Markets: Sentiment-Driven InvestingI could, of course, regale you with the fundamental case for emerging market investing. But that would be a waste of time. Much like risky bets on biotechnology, emerging markets are a boom or bust asset class. If the mood is right, investors pile in and drive stock prices sky-high. When emerging market stocks enter a bull market, they do so in a big way. Over the long term, stock prices will converge to their intrinsic values. But stock prices can diverge from their objective values for years - even decades. So you need to look for a trigger that signals a shift in investor sentiment. | 
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