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Advanced - Investing in Emerging Markets (E0029)

A: Dad, I’d like to borrow some money.

B: Sure, Johnny, how much do you need? five

bucks?

A: Come on, Dad, I need thirty thousand. I wanna

get into the market. You know, I’m tired of hearing

all this news about the economic downturn, the

inevitable recession, people stuffing their money

in their mattresses. I look at this as an opportunity.

This is a chance for me to get a jump start on

building my nest egg.

B: I don’t know about that; with all the uncertainty in

the markets right now, it would be a very unwise

decision to invest. I don’t know if you’re aware

son, but there has been a lot of turmoil in the markets recently. There have already been half a million layoffs in the last few months, and we have

no idea how the proposed stimulus package will

impact the economy. There’s just too much instability. I wouldn’t feel comfortable investing in this

climate.

Visit the Online Review and Discussion (text version). 

c 2008 Praxis Language Ltd.A: But look at it this way, every challenge is an opportunity. And anyway, I’m not talking about investing

in the domestic market. There are emerging markets that promise great returns. Look at China, for

example; they have 1.4 billion people, half a billion

of whom have recently entered the middle class.

Here alone, the aggregate demand for consumer

goods represents an amazing wealth generating

opportunity.

B: Come on, son, you’re looking at this too naively,

the Chinese market has exhibited a great deal of

instability, and their currency has been devalued

by almost a whole percentage point.

A: Fine, then! If that’s the way you feel, so be it. But

you’re losing out on a great opportunity here. I’m

going to go hit up Mum for the cash.

Key Vocabulary

inevitable Adjective unavoidable

Visit the Online Review and Discussion (text version). 

c 2008 Praxis Language Ltd.nest egg Noun (singular)

money that is saved to

pay for something in

the future, usually a

house, or retirement

turmoil Noun (noncount)

a state of confusion,

disorder, disturbance

stimulus package Phrase amount of money the

government uses to improve the economy

Noun (noncount)

state of not being stable, being likely to

change

emerging market Noun (plural)

nations undergoing

quick industrialization

Adjective combined

devalue Verb reduced in value

hit up Verb ask for money

Supplementary Vocabulary

depreciation Noun (noncount)

an decrease in the value

of something

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c 2008 Praxis Language Ltd.appreciation Noun (noncount)

an increase in the value

of something

inflation Noun (noncount)

an continual increase in

price

developing economy

Noun (plural)

growing economy

rapidly developing

country

Noun (plural)

countries undergoing

quick industrialization

industrialized nation

Noun (plural)

nations that have developed factories and businesses

Visit the Online Review and Discussion (text version). 

c 2008 Praxis Language Ltd.