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Long-term view for global investors

Stock-markets react badly to rising interest rates, and so short- term investors are rightly worried that the UK stock market is more likely to fall than it is to rise from this point onwards.

Longer-term investors, however, can afford to ignore short-term rises and falls in share prices, knowing that over periods of 10 years or more shares will outperform fixed interest securities and deposit accounts in almost every circumstance short of a revolution.

Really long-term investors have a different perspective, however. A quarter- century ago the world was divided into a couple of dozen developed economies, the so-called Eastern Bloc, and the Third World, covering most of Africa, Asia and Latin America, almost all of them poor and undeveloped economies, in which only a handful of countries, mainly the Asian tigers, were making economic progress.

The rich nations then accounted for two-thirds of world output. Now they are down to a half, and in another 25 years the emerging nations will account for two-thirds of a vastly greater volume of output. Free trade, free capital movements and free flows of technology from high-cost, low- growth economies to low-cost and high-growth ones apparently make the process unstoppable.

There are now plenty of investment trusts and unit trusts listed in the financial press that invest in emerging markets generally, and an increasing number that invest in specific regions or even in specific countries such as Argentina, India or Poland. Charges are higher than on routine UK trusts and tracker funds, but over the years they seem certain to outperform the developed markets.

Investors who want to know about individual economies, markets and leading shares in the emerging world can now find the information in publications such as The UBS Guide to Emerging Markets, published by Bloomsbury Press at pounds 30n