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Turbulent Times in Emerging Markets

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The term “emerging markets” refers to developing nations that show signs of progress, such as significant growth in gross domestic product (GDP) and infrastructure. Altogether, developing nations account for about 40% of global GDP, compared with about 18% two decades ago.1
Morningstar data suggests that emerging market stocks are about 50% riskier than U.S. stocks, which is why any decision to invest in emerging market stocks should begin with a thorough examination of your risk tolerance.2 For investors who can handle the bumpy ride, emerging market investments may have the potential to generate higher average returns over the long term.
The return and principal value of stocks fluctuate with changes in market conditions. Shares, when sold, may be worth more or less than their original cost. Investing internationally carries additional risks that often result in greater share price volatility. Many of these risks (such as differences in financial reporting, currency exchange risk, as well as economic and political risks) tend to be more pronounced in less developed nations.
U.S. stocks have experienced a lengthy bull market in recent years, but a tightening of global monetary conditions has taken a toll on the performance of emerging market investments.
Capital flight. In the wake of the 2008 financial crisis, the Federal Reserve began pumping liquidity into the global economy, and much of it flowed into booming emerging markets. The 2013 decision to begin tapering bond purchases pushed up Treasury yields and strengthened the dollar. The prospect of higher interest rates in the United States and elsewhere caused many investors to pull money out of emerging markets in favor of more stable advanced economies.3
Vulnerable currencies. To keep their currencies from depreciating rapidly against the dollar, a number of nations — including Argentina, Turkey, and South Africa — raised interest rates sharply in early 2014. Higher rates may attract foreign investment, but they also threaten to spur inflation, raise borrowing costs, and hinder economic growth.4
Slowing growth. The Chinese economy expanded 7.7% in 2013 and 2012 and 9.3% in 2011. Chinese officials have set a 7.5% growth target for 2014 as part of a plan to restructure the economy by increasing consumption and reducing the nation’s dependence on exports. However, the International Monetary Fund has warned that China’s slowdown could also affect growth in emerging market economies.5
Political problems. Some nations such as Thailand, Turkey, and Ukraine have unstable governments and/or suffer from social unrest. Russia’s annexation of Crimea in Ukraine prompted Western nations to impose sanctions, and rising borrowing costs threaten to send the world’s eighth-largest economy into a recession.6
Ready to Rebound?
Many emerging market economies will remain the world’s fastest growing, even if they don’t expand as fast as they did in the past.7 Disciplined investors may have the opportunity to add emerging market shares to their portfolios at attractive prices. At the end of the first quarter of 2014, the MSCI Emerging Markets Index traded at a price-to-earnings ratio of about 10, well below the historical average of about 14.8
Taking a diversified approach and investing across many nations and sectors may help reduce your exposure to isolated events and keep you from reacting emotionally. But remember that diversification does not guarantee a profit or protect against investment loss; rather, it is a method used to help manage investment risk.
1) Bloomberg, January 27, 2014
2) Kiplinger’s Personal Finance, November 2013
3–4) Forbes, February 3, 2014
5) Bloomberg, April 3, 2014
6, 8) The New York Times, April 4, 2014
7) The Wall Street Journal, August 12, 2013
The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. Copyright 2014 Emerald Connect, LLC.

A. RANDALL Financial

8832 SW 209 Terrace
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Cutler Bay, FL
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33189

Phone: 305 964-6109 or 757 535-8623

www.arandallfinancial.com
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aroyston@arandallfinancial.com

DISCLOSURE STATEMENT

RANDALL Financial is an Independent Financial Advisor and a Registered Representative.

Capital City Securities is an introducing broker and a member of FINRA, MSRB, and SIPC.  Capital City Asset Management Group, LLC (CCAMG) is a registered investment advisor under the Investment Advisors Act of 1940 and provides investment management for its clients’ accounts.  Capital City Asset Management Group, LLC, Capital City Consulting Group, LLC (an investment banking organization); Capital City Insurance Group, LLC (an Insurance Agency); Capital City Securities, LLC (a securities Broker/Dealer); and Cap City Management, LLC (a fund management company) are wholly owned subsidiaries of Capital City Partners, Inc.
RBC Correspondent Services and/or RBC Advisor Services, divisions of RBC Capital Markets Corporation, member NYSE/FINRA/SIPC, provide custody services for accounts managed by your Investment Professional. The referenced product or service is available through that relationship.
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Robb & Stucky furniture retailer to reopen in South Florida – Sun Sentinel

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Robb & Stucky, the luxury home furnishing retailer, is making a comeback in South Florida.
The retailer based in Fort Myers plans to open a showroom in Coral Gables this year and in Boca Raton by next year.
In 2011, Robb & Stucky liquidated inventory from its 20 stores in Florida, Texas, Arizona and Nevada after filing to reorganize under Chapter 11 bankruptcy. In South Florida, Robb & Stucky had showrooms in Palm Beach Gardens and Boca Raton.
Source: www.sun-sentinel.com

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MIA: SBE Sells SLS South Beach for $125 Million

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Following the sale of the SLS Beverly Hills hotel for $195 million to Torrance multilevel marketing and hotel firm Sunrider International in May, Sam Nazarin has now sold the high-end and chic SLS Hotel South Beach. The famed hotel at 1701 Collins Avenue has a new owner, GoldenPeak Capital Real Estate, ooo bought the haute property for a reporterd $125 million, in other words $892,857 per room.
Source: www.hauteliving.com

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PRESENTATIONS

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Antonio Garrido is President and Founder of Absolute Sales Development – Miami’s own Sandler Sales Training organization that provides companies of all sizes with superior business-growth training. Visit: www.absolute.sandler.com or contact: (786)-527 0277
Twitter: @SandlerASDMiami

The TACTIC: Who pulls the trigger?
The STORY:
Mark was meeting with the president of the company, the sales manager, and the office manager.
Prior to the meeting, Mark had determined the president was the one who would make the decision, as long as the sales manager was positive. He wasn’t quite sure why the office manager was there, since she had yet to ask a single question.
“So,” went on Mark, making eye contact with the sales manager, “you said earlier that our prospect tracking and geographical mapping system would greatly add to your strategic planning.”
“Definitely,” he responded.
Mark waited a moment to see if he would expand on his comment, and seeing that no further response was coming, asked, “By definitely, what exactly do you mean?”
“Well,” said the sales manager, who then proceeded to talk for the next five or so minutes. Every now and then, the president added a comment.
“Now,” said the president, “all of us here at this meeting have one major concern, which you and I covered a week ago when the two of us met; I think it needs to be addressed.”
“And that would be…” asked Mark
“Concerns over training how to use the system and whom do we deal with when they,” gesturing to his sales manager and office manager, “have software questions.”
 
“Understand the concern… so, as sales manager, what specific concerns do you have?”
 
The sales manager and Mark spent the next 1 0 minutes going over those. At the conclusion, Mark looked at the office manager, who still had not said anything, and asked, “Do you have any questions?”
 
“Well, most of them you already answered, and the others are minor.”
 
“So you don’t have any questions now?”
 
“I guess I don’t.”
 
“Okay,” said Mark, “what would you like me to do now?”
The RESULT:
Mark knew who the decision maker was. Unfortunately, he ignored the minor questions of the office manager by dismissing her and basically telling her she didn’t have any questions. Can you picture her saying to the other two folks, after Mark leaves, “Don’t feel good about this system, not sure why. Who else is coming in?”
 
DISCUSSION:
Every salesperson is told to make sure that the presentation, the talk, and the direct mail piece is sent to the decision maker. Sometimes in the rush to concentrate on the decision maker, those who also influence the outcome can be overlooked.
 
People who are ignored, because nothing was asked of them, can easily develop a great deal of resentment. It’s not enough to smile at everyone present and make eye contact with everyone. Because everyone smiles back, and makes eye contact with you, doesn’t mean they are pleased with you.
 
Good manners, which we all try to have in any encounter, dictate the appearance of involvement.
 
A problem for some salespeople is that they assume good manners are enough. Because the spouse, the partner, or the office manager doesn’t say much of anything, and smiles and nods at the correct time, it’s easy for the salesperson to delude themselves into believing those people are “on board” for the sale happening,
 
These silent prospects could be thinking that what you are proposing is wrong, dumb, stupid, off-the-mark. How do you find out? By asking, “Do you have any questions?” No-this is just a polite way of saying, “OK, I’m done selling. Now write me a check.”
 
APPROACH:
Ask each person to whom you are making a proposal at least two or three questions which demand an answer and then wait for an answer. For example, “How do you see yourself using the (whatever)?” Or, “Bill made an excellent point earlier that I had not considered, and I really appreciate his bringing it to my attention… I sense that you might also help me out the same way… ” and then wait for them to respond.
 
Even if you don’t get much of a response, you are involving them in making the decision by simply asking for their input. You might have heard the adage, “An involved prospect is a buying prospect.” It’s true.
 
Everyone in the prospect group you are talking to needs to be recognized as involved in the decision. You make that happen by taking the initiative to get them involved.
 
Never ask, “Do you have any questions?”
THOUGHT:
Never assume you know who OKs the check being written; it could well be the person at the meeting who sat there like a bump on the log.

Sandler Training is a global training organization with nearly 50 years of top-flight training experience. Sandler Training provides training and consulting services for small-to-medium-sized businesses, as well as corporate training for Fortune 1000 companies. With over 250 offices located throughout the USA alone, Sandler’s goal is to help clients initiate substantive, measurable and sustainable growth.

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