Three Reasons Emerging Market Investors Are Getting Dumped. Emerging markets investors – and their hard-earned capital – are about to get dumped on their derrieres.

Keep an eye on the Chinese and Brazilian stock markets on Monday.

Last August, in an exclusive article to Oxford Club members, I badmouthed decoupling – the theory that the rest of the world (particularly emerging economies) could somehow party on while the U.S economy endured a recession.

As I have said countless times on these pages over the past several months, making money in the options market is all about being on the right side of volatility.

Like most investors, Harvard University’s billion-dollar endowment fund took a beating during the global financial crisis. Many investors cashed out, opting for the safety of the sidelines. But Harvard called a new play. During the first quarter, Harvard engineered a dramatic shift in its endowment-fund investment strategy – boosting its stakes in some of the most prominent emerging market exchange traded funds (ETFs).

From the tidal wave of e-mails and comments I have received from numerous different sources I am under the impression that most investors view the recent rally in the world’s stock markets as a bear market rally. I suppose we would need to define a bear market rally as a rally that fails to make a new all-time high (for the S&P 500, above the 1576 reached in October 2007) and is also followed by a new low for this cycle (below 666 for the S&P 500 reached in early March 2009).

Oxford Club’s Alexander Green says making the switch from mutual funds to ETFs can save thousands in taxes and expenses. Changing funds now can also help psychologically, by locking this year’s huge losses in the past. Alex lists eight ETFs that can “help turn market lemons into lemonade.”

Since 1998, the Morgan Stanley Capital International (MSCI) Emerging Markets Index (NYSE:EEM) has gained 13.5% per annum or 9.5% annually adjusted for inflation. That’s the highest total return posted by any broad global index over the last decade. This one number flat-out confirms that major markets have lagged behind emerging markets.

A couple of years ago, emerging markets nations in Latin America and Asia could do no wrong. That’s all changed. However, there may still be a great way to play emerging markets with a stellar ETF performer, says Jim Stanton in The Smart Profits Report.