[DcifrThs]

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assuming you won't need your money for 10-20+ years, why not just go for a portfolio of emerging market index funds/stocks. What is the likelyhood that these countries are not going to out perform for the developed countries?

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this isn't how you need to think to construct a portfolio.

it is like saying, "what are the odds that a tech heavy portfolio won't outperform the S&Pindex over 20-30 years?"

those odds are probably pretty long (i.e. the tech sector will outperform).

but in risk adjusted returns, the S&P will vastly outperform the tech sector.

emerging markets have, and will likely continue to outperform in absolute terms their developing country counterparts. but, when you take risk into account, they do about the same (as does just about every asset class except commodities).

your goal should be to maximize your risk adjusted returns, not shoot for outperformance since the latter usually comes with a very large degree of risk.

you may then counter to say "but i just want to maximize returns."

well you can construct a solid portfolio and then tune it, with leverage, to whatever risk level you want (the return falls out of your risk target).

since drawdowns (downswings) hurt your portfolio disproportionately, reducing their severity and frequency massively improves your portfolio's performance.

Barron