How to Invest In Emerging Markets
Stay Wealthy Retirement Podcast
Taylor Schulte, CFP®
2.4 • 606 Ratings
🗓️ 21 November 2024
⏱️ 38 minutes
🧾️ Download transcript
Summary
Emerging Markets are the world’s primary drivers of global growth (and wealth accumulation).
Just over 50% of the world's economic output comes from these countries. 🤯
They play a crucial role in shaping global economic trends...
...but most retirement investors don't fully understand this asset class.
To help break it down for us, Emerging Markets expert and founder of Life + Liberty Indexes, Perth Tolle, stops by to discuss:
➤ What Emerging Markets are and why retirement savers should consider investing in this asset class
➤ Why traditional, low-cost Emerging Market funds may produce lower returns
➤ The pros/cons of excluding countries like China and Russia from an Emerging Markets fund
We also discuss why "freedom" plays an important role in this asset class and how investors can (potentially) use freedom metrics to capture higher returns.
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Transcript
Click on a timestamp to play from that location
| 0:00.0 | This show is a proud member of the Retirement Podcast Network. |
| 0:05.0 | Perth Toll was born in Beijing, China. |
| 0:06.8 | She came to the U.S. at the age of nine, and after graduating from Trinity University in San Antonio, Texas, she went back to China to live with her father for a year and reconnect with her Chinese roots. |
| 0:17.9 | During her time there, Perth met a 23-year-old named Maggie. While both were the same |
| 0:22.5 | age, they had wildly different upbringings. Maggie didn't have school records. She didn't have |
| 0:27.9 | hospital records. She didn't even have a birth certificate. To the Chinese government, Maggie did not |
| 0:33.3 | exist. And that's because, along with tens of millions of other kids, she was a victim of the |
| 0:38.6 | communist party's one-child policy. The one-child policy was in effect from 1980 through 2015 |
| 0:45.0 | and was implemented to curb the population growth in China. Since Maggie's parents already had a |
| 0:50.9 | child, they had to hide her existence from the government. Perth told Forbes in |
| 0:55.4 | 2022, quote, that policy changed the culture of my generation and the effects of the demographic |
| 1:01.3 | disaster in China are irreversible. Unlike the United States and other developed countries, |
| 1:06.9 | China is not a free nation. And Perth's time with Maggie made her realize that growing up in America, |
| 1:13.0 | growing up with freedom made a giant difference in her life. This realization also led her to |
| 1:18.6 | hypothesize that freedom likely made a difference in the markets as well. Freeer markets have |
| 1:24.8 | more sustainable growth. They recover faster from drawdowns, and they use |
| 1:28.2 | their capital and labor more efficiently, Perth told Forbes. Perth was a guest on this podcast in 2019, |
| 1:34.9 | right around the time of the launch of her new fund, the Freedom 100 Emerging Markets Fund, |
| 1:40.0 | ticker FRDM, short for Freedom. Since theTF launched five and a half years ago, it has produced |
| 1:45.9 | a total return of 52%. Meanwhile, the ultra low-cost vanguard emerging markets fund, ticker VWO, |
| 1:53.6 | returned just 31% during the same time period. Strong performance of a fund is one thing. |
| 2:00.0 | Actual dollars committed is another. Since |
... |
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