Best Timespan for Market Analysis

Guide plus Showcase
of Exchange Traded Funds
for Emerging and Developed Markets

The best choice of timespan for a performance review depends on the status of the investor as well as the state of the market. In this way, a fitting window in the backward direction is closely tied to the planning horizon going forward coupled with the likely conditions downrange.

In that case, the impact of an unusual event in the past ought to be downplayed or excised entirely. To this end, one approach is to select a short window that excludes the exceptional fluke. The second ploy is to pick a prolonged stretch that serves to dilute the impact of the aberrant case on the marketplace.

Depending on the context, the investor may have scant choice regarding the use of one approach or the other. An example involves a youthful asset which has little to offer in the  way of a price history. In that case, the use of a prolonged window is out of the question.

An apt choice of timespan applies to any type of market, whether tangible or virtual. An example is found in a lonesome stock or a personal portfolio, a raw commodity or a national economy.

In the modern era, a glaring anomaly cropped up with the financial crisis of 2008 and its aftermath. The bombshell sparked the worst smashup of the financial system since the Great Depression of the 1930s, along with the biggest flop of the global economy since the Second World War. As a result, the blowup was an oddball on a whopping scale which is unlikely to recur in the near future.

Given this backdrop, a wanton choice of time frame for market analysis could lead to warped results which have scant relevance to the prospects downrange. In that case, the cogent approach is to tone down or cut out the extreme effects resulting from the financial catastrophe.

These issues are examined by way of a case study dealing with exchange traded funds for the emerging regions as well as developed markets. The quartet of index funds under review includes a couple of vehicles which in some sense straddle the entire planet. By contrast, the remaining two vessels focus on a pair of individual countries; namely, the U.S. and Britain which serve as spearheads of the financial forum and the real economy for the world at large.

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