Emerging-Market Bond Yields Tempt Investors

Global investors sold off $40 billion worth of emerging-market stocks and bonds during the third quarter of 2015 alone, according to the Institute of International Finance. At the same time, the International Monetary Fund (IMF) warned that emerging-market corporate debt of nonfinancial firms quadrupled between 2004 and 2014 from $4 trillion to $18 trillion. This could create problems for dollar-denominated issues when interest rates are hiked in the United States. Of course, Baron Rothschild famously said, “The time to buy is when there’s blood on the streets.” Meaning that massive sell-offs may create massive buying opportunities.