A Significant Breakout After 14 Years

A strong signal is emerging from the markets in developing countries. The equal-weighted index of emerging market stocks has experienced a breakout after nearly 14 years (see image below). This is a significant development that could signal the start of a new trend. It suggests that important changes are taking place in the global financial markets, particularly concerning the US dollar and its effects on other assets.

Source : TaviCosta on X

The Dollar is Weakening

One of the primary reasons for this breakout is the recent decline of the US dollar. In 2025 alone, the dollar has depreciated by approximately 10-11%. A weaker dollar creates substantial opportunities in other areas, especially in emerging markets, commodities, and precious metals like gold and silver. When the dollar weakens, it typically leads to increased investment in foreign markets, making them more appealing.

Hard Assets are Gaining Strength

Gold has already been at the forefront, and now silver is also gaining momentum. Historically, such trends have led to prolonged rallies in metals and commodities. These movements are not short-lived; they often last for years. When the dollar declines over an extended period, it provides a significant boost to hard assets and global markets. We may be on the verge of entering such a long-lasting cycle once again.

History Shows Similar Trends

We have seen similar patterns in the past—during the 1970s and early 2000s. In those times, both gold and emerging market stocks experienced substantial gains. If a similar shift occurs again, we could witness major movements across various sectors.

Is There a Big Opportunity Ahead?

This breakout could serve as a turning point for investors looking to explore opportunities beyond the US market. As capital flows out of dollar-based assets, countries with burgeoning markets and abundant resources could benefit significantly. If history is any indicator, now could be a prime time to keep a close eye on emerging markets.

Is your portfolio prepared for a potential downtrend in the dollar? Share your thoughts in the comments below, and feel free to SHARE this blog if you found it valuable!