emerging markets

Emerging markets

The financial markets of developing economies.

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emerging markets

Security markets in countries such as Mexico and Malaysia that are still developing their industrial base. Investments in emerging markets entail substantial risk with the potential for above-average returns.

Are the stocks of companies in emerging markets particularly risky?

Investing in emerging markets is considered very risky. The financial markets of developing countries are typically small, with a short operating history. Emerging markets exist in undeveloped regions of the world, which are very volatile and therefore have great growth potentials but also pose significant risks. Corruption, political instability, illiquidity, and currency collapse are just some of the significant risks of emerging regions. Argentina's economic collapse is the latest example of the risk involved in emerging countries.

Thomas M. Tarnowski, Senior Business Analyst, Global Investment Banking Division, Citigroup, Inc.Salomon Smith Barney, New York, NY, and London, UK