Martin Gilbert, co-founder and chief executive of Aberdeen Asset Management, looks at how sentiment towards Asia and emerging markets has changed over the past two decades.
Election impact
All investing is better done for the long term and doing so in emerging markets perhaps even more so. They have had their share of ups and downs of their own makings - like the Asian crisis - but have also suffered from the decisions of others too.
Asian and emerging stockmarkets experienced panic selling in the aftermath of Donald Trump's victory in the US Presidential Election last November.
I can recall headlines such as "Emerging markets sink after Trump victory" and "Tidal wave of selling follows Trump's US election victory".
Just six months on, the story has changed to Strong fundamentals lift FTSE Emerging Markets index and Foreign capital is flocking back to emerging markets in Asia.
This turnaround is partly driven by a more considered view of the risks posed by a Trump presidency, as well as increasing confidence in the economic and earnings recovery that emerging markets are experiencing.
Risks
Risks of course remain: geopolitical tensions on the Korean peninsula and growth slowing in China, being just two. But it was striking the panic about emerging markets in the West was not matched on-the-ground in the markets themselves.
When it comes to investing, it is crucial to draw on lessons from the past, keep calm in the present, look to the future and continually ask questions.
Perhaps Einstein's advice can be refined to: "Learn from yesterday, survive today and invest for tomorrow. The important thing is not to stop questioning."
