Bonds (esp TIPS) are the only thing to be in if you are investing in US, a generally pretty foolish thing to start with. US Equities are a fools game based held up on helium due to QE (no where else to go, now THAT is a good way to invest) and phoney govt economic stats. to make you think all is roses here. The WSJ reported yesterday that 16 out of 19 quarters of FED reported GDP since BO was elected in 2008 were overestimated and revised downward to reflect reality. Nobody knows how bad things really are, but we will soon enough once people realize that S&P forward PEs are 25-30% too low.
Emerging markets, TIPS and hard assets are the only plays now because the results of Fed infusion are not there anymore, if at all.
I'm not disagreeing with you, but folks should know that emerging markets tend to sell off when US "blue chips" sell off. I don't always understand investor psychology, but when fears runs the market, investors tend to sell all equities at the same time. Over the very long term, maybe it's a different story.
You are correct, but I think the model has changed and the disconnect gets greater with each passing year as EM economies become more independent of Developed World. China, for example, has huge internal/organic growth that will be less dependent on exports. Also, I think the PE ratios for almost all EMs are lower now than their historical averages. They are also lower then US PEs and have much better growth prospects than us for 2013-2014.