The iShares MSCI Emerging Markets Index ETF (EEM) recently traded below a key 2-year uptrend relative to the iShares MSCI EAFE Index ETF (EFA). That suggests the long period of outperformance in the riskier and more volatile foreign markets is poised to end, at least in the near term.

With the overall investing climate becoming decidedly more hostile, it makes sense to favor the more defensive EAFE index when it comes to allocating funds overseas:

Michael Panzner

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