• Undervalued emerging stocks lure traders back to risky assets
• Despite small market share, active EM ETFs see big inflows

Overestimating your swimming ability and underestimating the riptide is a recipe for disaster. The same is true in the markets. What may look like a broadening out of performance can turn into a new trend – a tide – which takes you out to “sea” if you aren’t in the right stocks. It’s like a “riptide warning.”

Thankfully, we have an investing guide here at Chaikin Analytics to help us… You see, our Power Gauge system doesn’t just track fundamentals. It also gives us technical indicators. And the one I tend to rely on the most is relative strength.

Investors face threats from geopolitical risks and the fact that higher rates and inflation haven’t yet materially impacted corporate profits. Higher rates can threaten growth stocks by applying higher discount rates to earnings in distant future years, reducing the present value of those cash flows. Companies with high current free cash flow have the resources to deal better with higher levels of interest rates.