In light of recent market volatility, it is important for investors to remember that while emerging markets may have a tough road ahead, the underlying economic picture in the developed world has proven resilient. The G3 economies, Europe (the 28 European Union countries), the U.S., and Japan account for approximately 52% of global GDP, and as such are major drivers of global demand. Unemployment rates in these economies have continued to decline gradually and the improvement in economic growth across the developed world should support further job creation, improving consumer confidence, and stronger consumption. These are all positive developments for corporations, as falling unemployment is indicative of an expanding business sector. As such, it is important for investors to look through the volatility of the past few weeks, and instead focus on thoughtful asset allocation which tilts them toward those areas which have proven relatively insulated from the contraction in emerging markets.
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(Source: JP Morgan)
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