@myst4au wrote:
I expect Chinese stocks (and that means VWO) to drop significantly when the Chinese stock markets open after being closed for a week. Because many non-China stocks are in VWO, they will be pulled down by inclusion in the index. Which means that EMXC will trade down. I put in an order to buy EMXC down 10% in pre-market trading on Monday. That probably is more than it will actually drop (I hope for the sake of the economy), but that will keep me on my toes on Monday morning.
Looks like deaths outside of China are happening now.

I also expect both funds to trade down a lot Monday. I think global stocks could all go down for a while. It's hard to tell, of course. Maybe we get a cure and/or this gets contained relatively quickly and businesses aren't hurt too bad. My base case outlook is that we have a period of going lower, so a 10% drop from Friday's prices would not be surprising to me (although, I don't think it'd happen in one day).
Also, I have my eyes glued to Monday's Iowa caucuses. If Bernie Sanders (whose campaign I volunteered for in 2015/2016) wins, then markets could react badly as well. The Hill had an interesting statistic that said in modern times, no candidate who has won both Iowa and New Hampshire (the first two voting states) has not been able to capture the Democratic nomination. It would build a lot of momentum going into Super Tuesday.
Sanders looks like a heavy favorite to win New Hampshire and is in a statistical tie with Biden for Iowa. The recent national polls (Emerson and some other one) have Sanders leading Biden now by one point across the entire U.S.
The reason I started my post off with the word "long-term investor" is that I can certainly see how this thing can wallop emerging market stocks for a while. Should things morph into a worst case scenario, we could end up in a global recession (from both slowing economics and the virus). As someone who is not a trader, but rather a longer term value investor, I would not sell.
There's risk, but I'm personally okay with it. Even if emerging markets fall 25-30%, I could care less. I'd probably just buy more! Due to their already low valuation, they would rebound much faster than, say, very highly valued U.S. stocks (which could take 10 years to rebound if they fell for recessionary type of reasons). I had a long investing post on emerging markets here in case anyone hadn't read it yet and was interested:
[
www.mysteryshopforum.com] (thread page)
[
www.mysteryshopforum.com] (specific post)
I already thought they were a good investment and are now going to get a bigger discount (albeit, for good reason!) from the coronavirus.
@Tarantado wrote:
Good looking out, as I didn't notice this myself. Will plan to diversify and throw some into these ETF's during this Coronavirus crisis!
Yeah, the main thing to understand is that there is definitely a lot of short-term RISK. These are stocks/funds that could easily go down 10-20% in the short-term for a number of reasons. But, for the long-term, I am committed to emerging markets outperformance (over the next decade) versus U.S. markets.
I think Lyn Alden (to me, the absolute best poster on Seeking Alpha) makes a fantastic case for this that I talked about in the "Millionaire" thread (linked above).
We don't quite yet have "blood in the streets" with the virus, but it could morph into that and present tremendous buying opportunity later.
Edited 3 time(s). Last edit at 02/02/2020 08:37AM by shoptastic.