Bear markets are like ghosts. They can hang around for a while before manifesting. Market strategists are the mediums who try to call them out. One ominous shred of ectoplasm is a 20% drop in a stock benchmark. The MSCI emerging markets index dipped that much from its high on Wednesday. The simplicity of that measure belies the complexity of the asset groups represented. Have bears spotted a spook, or a bedsheet flapping on a washing line? Over the past 30 years the emerging markets index has tumbled sharply nine times before. Of those, five presaged bear periods in the months that followed, with a sideways-to-downward trajectory on the price chart. Not exactly a surefire indicator. Look at emerging market stocks via the MSCI local currency index and the drop in 2018 is just 14%. Currency shifts often account for a fair portion of movement in the better known dollar-based benchmark. The average price volatility of the emerging market index has been 17% in the past decade. That is se...

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