http://finance.yahoo.com/q/bc?s=VEIEX&t=my&l=on&z…
http://finance.yahoo.com/q/bc?s=VEIEX&t=6m&l=on&z…
Why would I risk capital on the hyper volatile emerging markets or any other international index when the same results, if not better, can be achieved by owning the diversified US energy index?
Can anyone run find a quick correlation statistic between the EEM and the XLE and post the results here?
This is for long term investment (20 yrs+). Think retirement money.
Vanguard's Emerging Markets index has only done 8% a year annualized since 1994.
Post your thoughts for or against. I might be way off base on this and just want to get some feedback.
I guess you can invest directly in(say, China) stocks, right?
The problem is that I want to allocate 20% of my portfolio to international companies or something directly correlated with them.
The broad Europe/Asia indexes have performed terribly since 1990, so they are out.
However, diversiified emerging markets have done 8%.
Again, the US Energy sector is much less volatile but performs just as well as China (see link)
http://finance.yahoo.com/q/bc?s=000001.SS&t=my&l=off&z=m&q=l&c=xle
Why own China when Exxon + Chevron do just as well but with less volatility?
Indeed.
Past performance is not indicative of future performance..
Agreed, same can be said of correlation. I'd be careful when drawing conclusions directly from statistics. You could probably find a security that was highly correlated with band-aid prices over a period of time, but it doesn't mean it would be a good hedge or replacement asset.
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