When newspapers and financial mag’s make strong transaction recommendations….

Just reading a Money Sense article Fixed income markets are heating up which made what I thought was a fairly strong recommendation to buy emerging market fixed interest securities:


…a firm belief that the world’s central banks will continue to keep global monetary policy very easy ….The excess liquidity that central banks hope will fuel employment markets will also fuel securities markets and that means one can expect markets to behave reasonably well over the foreseeable future…..emerging market fixed income markets are yielding much higher rates….but under the current benign conditions I believe it is a reasonable bet from a risk/reward viewpoint to enter these foreign waters…..the timing is now right for investors to move into this sector…..since I believe so strongly that the central banks will hold their ground and not tighten, the June selloff has presented us with a buying opportunity.

Now I am not against a discussion of whether, after the recent sell off in emerging market fixed interest segments, that this area represents value or a buying opportunity, but this article is more of a sale recommendation.  The article, in my opinion, expresses far too high a degree of certainty, a degree of certainty which I do not think the current financial and economic environment supports.  

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