Will emerging markets continue to exhibit high volatility?
All markets, including emerging markets, will continue to exhibit high volatility. With short selling, naked short selling, growing derivatives and the expansion of markets globally, volatility will be with us for some time to come. Derivatives, for example, are now valued at over US$600 trillion, more than 10 times the total global GDP. Some analysts say that gold is the only safe heaven when there is a huge uncertainty in the market. Do you agree? Why? Historically, gold has not been a good store of value. However, in the highly uncertain environment that we live in today, investors generally feel safer holding gold compared to cash. If money supply continues to grow at the rate of recent years, gold is likely to continue its strong run. Other commodities such as palladium, platinum and silver should out-perform as well. However, during times of massive uncertainty, we should not overlook equities. History has shown that buying stocks in times of maximum pessimism often lead to the h
