Thursday, November 12, 2009

The World Is on Fire

While the Dow has been on a tear this week, just completing its sixth positive day in a row, foreign stock markets have been even hotter. Emerging markets have just finished their strongest six days since July, and the average nation in the 82 countries with major equity indexes has seen a pop of more than 33 percent on the year. The S&P 500, by contrast, is up 20 percent.

Of those 82 national indexes, 71 are up on the year. The biggest gainer of them all is Russia, up a whopping 127 percent. The stock markets in the Ukraine, Argentina and Peru are also up more than 100 percent, meaning the value of their markets has doubled within the space of a year.

For many of these nations, the rebounds have been so strong because their losses were so great when their markets collapsed. The Russian market that looks so valuable this year lost some 70 percent of its value in 2008. But looking forward, the opportunities for diversification around the globe look very enticing.

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