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emerging market

The best way to think about it is to think about all the “developed markets” like the US, Japan, Europe and some others. These tend to be the largest economies in the world and the most advanced. Emerging markets are, essentially, less advanced. In the case of India and China, they can be quite large, but are still “developing.” Emerging markets often exhibit higher growth rates than developed economies, often because they are starting from a lower base (like a startup company, it’s easier to grow than a large, established company). But they also have higher risk. That can be due to political risk (think coups) as well as economic risks (like a lot of foreign investors might take their money out).

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