Metrics: Emerging Market Currency Volatility / Mature Market Currency Volatility

From the point of view of this indicator, this year's volatility has been as high as the 2008 financial tsunami and the 2002 plunge, even surpassing the 2011 European debt crisis, so is this year's volatility excessive? I think the answer is obvious.

As mentioned earlier, since the beginning of the US-China trade war in 2018, the bird incidents in various countries in emerging markets have also occurred at the same time. It is a sum of fears, and collective fears have caused collective decline.

The other line is the trend of the emerging market currency index. It is obvious that when the volatility expands, the emerging market currencies have obvious depreciation, but as the volatility begins to decrease, the emerging market currencies will appreciate significantly. Such performance reflects the investment in emerging markets, which is easily affected by collective panic, in which case emerging market countries with good value are also affected.

in conclusion

There is no need to worry too much about this year's depreciation. As long as the panic is gone, the investment will return to the fundamentals, and the volatility will provide a good entry point. Is it likely to be worse than it is now? No one knows where the lowest point is, but I can tell you that it is relatively low now. Buying on dips and long-term holdings are the secrets to winning. It is very simple to say and difficult to do. This is the real investment market.