"iShares MSCI Emerging Markets (ASE: EEM) is a bet on on a short-term bottom in emerging markets," says international expert Nick Vardy in The Global Bull Market Alert.
"This recommendation is based on the belief that the initiatives of policy makers across the globe will trigger a sustained, short-term bounce between now and the end of the year.
"First, the policy responses to the global economic crisis have been both massive and coordinated. These efforts combined will ease the shortage of dollars that has ravaged emerging markets.
"Second, emerging market equities are as cheap as they have ever been. The benchmark MSCI Emerging Markets index is trading at a P/E in the single digits, down from 18.5 a year ago.
"Markets such as Turkey and Russia are trading at a P/E below five. And while global growth has slowed, emerging markets are still expected to grow at an average of 5% in 2009, compared with 1% expected in developed markets. This adds up to considerable upside in global markets.
"Finally, emerging markets can turn on a dime. Since hitting a four-year low recently, the benchmark MSCI emerging equities index rocketed more than 24%. Fear can rapidly turn into greed.
"Overall, our recommendation is all about a 'relief rally' to lock in relatively short-term gains between now and the end of the year -- traditionally the strongest time of the year for emerging markets.
"So buy the iShares MSCI Emerging Markets at market, being aware that this pick is going to be extremely volatile. So you may want to take half of your normal position size here, and add to it as the trend becomes more established."
Steven Halpern's TheStockAdvisors.com offers a daily look at the latest market commentary and favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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