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Emerging markets slump doesn’t derail long-term outlook

Joyce Gordon
Porfolio counselor
Based in:
Los Angeles office
Investment experience:

JOYCE GORDON: Really, around the globe, we’re seeing emerging market countries struggling.

But having said that, I think that long-term growth of goods going into emerging market countries is still going to be intact. I think that this is a normal cyclical reaction and that the secular factors are still at work with rising population [and] people becoming more affluent and demanding goods. A lot of the U.S. companies and global companies around the world have increased their percent of sales going into emerging markets; some companies have more than 50% of their sales going there.

I think that this is just a pause and that we get back on track. So I’m not alarmed by companies that have sluggish earnings growth right now due to this, because I really do think it comes back. And if the market penalizes them, then we have another opportunity to get in and buy them.

There are some industrial companies that are pretty interesting that derive more than half of their earnings from emerging markets. I really like to see companies that are strong enough to continue to invest in their long-term thesis of trying to get to that point, and they can do it at times like this when they can buy inexpensively.

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