Investments Article Review: Value Investing in the Emerging Market

The S&P 500 cyclically adjusted price-earnings ratio graph shows that there are high chances of a drop in the market of the same as the years pass. The decline is significantly evident from the fact that, some years have got very low ratios while others have slightly higher proportions. The graph of the cyclically adjusted price earning shows an irregular curve outcome showing that over the coming years, the investors who have placed their investments in the same sector risks to lose their market. As a result, the graph shows that many individuals are not interested in the goods which are available at the moment and therefore, indicating a need for the correction of the market.

To satisfy the need to curb the problem of the fall in the market, the investors should be able to shift their markets to the areas which are having a negative correlation with the present areas. The S&P 500 can be outperformed by the help of employing the new economic technologies in the market hence improving the quality of the services provided. Those investors who would like to purchase in discounts if they are interested in the emerging markets therefore, are able to increase the income.

Some factors may affect the emerging markets, for instance, political stability affects the markets since when the political status of a country is stable, there are so many infrastructures which are put up and therefore, the investors on commodities related to infrastructures are highly favored. Another factor is tax plan of a country to its investors. The tax plan of a state determines the amount of profit garnered by the investors and hence can discourage them from the operations or not.

As from the graph relating to money, interest and the future of asset allocation, it is shown that as the interests increases, the demands for cash also increases and therefore, the asset allocation shall be able to improve. The situation seen today must be averted to bring forth a good relationship between money, interest and the future of asset allocation.

The banks, therefore, should come up with regulations to see that the prices of houses come down to enable the most vulnerable persons to be able to access the apartments. The investors will have to employ a series of strategies to be able to curb the problems of low rates of interests. Therefore, it is of highest fault for an investor to think that there is only one strategy that can be used to solve the problem. It is evident that the interest rates can always go up very quickly hence making it difficult to react to the rise. Therefore, an investor should focus on short-term or medium-term bonds since they bear minimal sensitivity to change in rates and should avoid at all cost the long-term relationships as they are susceptible to change in interest rates.

The increased inflation rate resulted from the lower rates of interests which seriously affects the economy of a country. The lower interest rates ensured that more money was generated by the banks hence investors can lend it at any time. The high borrowing rates lead to high inflation, and therefore, the economic growth of a country is very slow. The investors are consequently not able to further lend the money hence economic constraints.