It's hard to be bullish with a growing chorus of voices chanting the end of the euro zone is nigh. But one influential investor thinks Europe will emerge from its debt crisis intact and stronger than ever.
Mark Mobius, Executive Chairman of Templeton Emerging Markets Group, told CNBC Asia that European countries are engaged in a prolonged and necessary game of chicken.
"This will go on, back and forth for a long time. They have to agree on fiscal responsibility and adhere to certain principles they have not had to do before. It's a big change but I think they will make these reforms and Europe will emerge much stronger than ever before," he said.
Mobius, who oversees $50 billion in assets, is predicting Europe will have the framework for a fiscal union in place within one to two years.
He adds that investors who stay parked in safe havens for too long, will miss an ensuing rebound in global markets.
"During the sub-prime crisis everyone was in a panic, everybody got out of all markets and rushed into U.S. Treasurys. They learnt a bitter lesson because within 12 months, (many) markets were up 60, 70, 80, 90 to 100 percent."
Mobius is famous for his expertise in emerging markets and believes they offer the best opportunities for investors. "The average growth this year will be five percent, compared to less than one percent in developed countries. They represent 34 percent of the world's market capitalization and most people have very little, if anything, in emerging markets," he said.
His favorite developing economies are Vietnam and Nigeria.
Mobius recommends investors gain exposure by dollar cost averaging into mutual funds that focus on emerging markets. He suggests instead of jumping in with a lump sum, putting in a small amount every month over three or four years and limit risk by diversifying amongst countries, sectors and managers.
He has recently released a new book called "Little Book of Emerging Markets" which guides investors on how to make money in the world's fastest growing economies.
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