To which I say: Wake up and smell the new world order. The U.S. financial markets are relatively riskier now than they were five years ago, and (many) emerging country financial markets are relatively less risky. If you haven’t updated your view of what’s called country risk in the last five years, you’re costing yourself money.
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And as I look ahead, I see few signs that the United States will put its financial ship into better trim and lower the country risk that comes with owning U.S. equities and bonds.
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I think you need to compare markets one by one to look for those where investors, who tend to stick with the conventional wisdom until something whacks them over the head, have mispriced risk. The countries that I find particularly interesting as investment targets are those that have made the biggest strides in getting their houses in order.