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Emerging markets are still providing a lot of opportunity. The growth potential in these markets is more significant than in the more developed and mature United States, United Kingdom and Canadian markets. While there are always blossoming stocks and money to be made in mature markets, emerging markets have more potential and have for the most part been outperforming the mature markets over the last several years. For example, Mexico, which is highlighted below, has performed more than nine times better than the S&P 500 over the last 10 years. Emerging markets are a mixed bag, however, as some have been performing exceptionally well over the last several years - a trend which quite possibly could continue into 2013 - while others have fallen and present an opportunity to buy at a "value" level.

Mexico
The Mexican market is accessible through the iShares MCSI Mexico (ARCA:EWW) ETF, and that ETF is up 481% over the last 10 years, as of Nov. 16, 2012. Compare that to the S&P 500 SPDR ETF (ARCA:SPY) which is up 53% over the same period. A new high at $69.01 was created in 2012, indicating this long-term uptrend is still intact.

Mexican ETF 10-year monthly
Figure 2: Mexican ETF 10-year monthly.
Image Courtesy: thinkorswim


Look for that uptrend to continue into 2013. However, be aware of the 2011 to 2012 trendline. If the ETF drops below $60 it is an early warning that the ETF could fall even further into the $46 support area or below.

Malaysia
The Malaysian market is accessible through the iShares MCSI Malaysia (ARCA:EWM) ETF. Strength over the last 10 years - and up 204% as of Nov. 16, 2012 - shows this ETF is still in an uptrend which could continue into 2013. The Malaysian market is still holding up well, even as the U.S. indexes have fallen in late 2012.

Malaysian ETF 10-year monthly
Figure 3: Malaysian ETF 10-year monthly.
Image Courtesy: thinkorswim


If the Malaysian ETF rallies back above $15.21, the 2012 high, it is likely the 2011 high at $15.48 will also be reached and the uptrend is continuing. On the other hand, if those highs aren't reached, the market could be heading for a long-term downtrend if it moves below $13.47 - the June 2012 low.

South Africa
The South African market is accessible through the iShares MCSI South Africa (ARCA:EZA) ETF; it is up 230.86% (as of Nov. 16, 2012) since inception in February 2003. The long-term trend is up, but the ETF currently trades within a triangle pattern. The triangle is typically a continuation pattern, indicating the long-term uptrend will resume, quite possibly in 2013.

The South African ETF 10-year monthly
Figure 4: The South African ETF 10-year monthly.
Image Courtesy:thinkorswim


A rally above $69 signals a resumption of the uptrend, targeting $88. On the other hand a decline below $60 indicates a downside move is likely coming, targeting $42.50.

Argentina
The Argentine market is accessible through the Global X Funds Argentina 20 (Nasdaq:ARGT). Through 2011 and 2012 the Argentine market has been in a downtrend, but over the last 10 years the overall trend is up. The recent down move is creating a possible entry point during 2013 for the next wave higher in the Argentine market. For a buy signal to occur, however, the index will need to rally above 2,600 - $9.25 on the ETF.

Argentine Index January 1999 to November 2012
Figure 5: Argentine Index January 1999 to November 2012.
Image Courtesy: thinkorswim


The ETF has only been around since February 2011 and has low volume - usually less than 10,000 shares a day.

Next: Top Investment Trends For 2013: Gold »


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