Whether you believe it or not, the China slowdown story is back again and starting to gain traction and casting doubt on emerging markets everywhere. In the past month alone, the Shanghai Composite has fallen 7%, while the Nasdaq and S&P 5oo have remained positive. India, Brazil and most of Europe are also lower.
At this point, it's not so much IF it's happening, as it is a question of WHY it's happening. For investors like David Steinberg, founder of DLS Capital, it means only one thing.
"To me, a bump in the road is an opportunity," Steinberg says, who thinks too much is being made over whether China's GDP slows to eight, seven or six percent this year, rather than embracing the long-term opportunity. "Directionally, their economy is growing. Demand is picking up."
Compared to the 35% free-fall the Emerging Markets (EEM) took last summer, the current decline is, literally, just a bump in the road, but for anyone who has spent any time around emerging markets, it is not a place for the feint of heart, and they likely have the scars to show it.Read More »from China and Emerging Market Weakness: A Bump or a Crack in the Road?