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Richard Bernstein recently published his five favorite investment themes. One of those themes: "Overweight of smaller US stocks, with an eye for smaller, domestically-oriented financials."One characteristic that makes this sector attractive is its extraordinary earnings growth potential.From Bernstein's 2012 outlook:We continue to believe the best secular investment theme in the global equity markets is US small caps. Smaller US companies are starved for capital much the way that emerging markets, energy, commodities were ten years ago. By definition, capital starved companies’ higher cost of capital translates to higher expected returns for investors.Investors appear to be overlooking smaller US companies’ fundamentals....

Investors flee emerging markets, boosting dollar By Jeremy Gaunt, European Investment Correspondent Jeremy Gaunt, European Investment Correspondent LONDON (Reuters) – A flight from emerging market debt and stocks helped push the dollar to a two-year high against major currencies on Thursday as fears built about a global recession. Investors were also focusing on major company earnings reports, fearful that the worst financial crisis in 80 years and the deteriorating global economy could combine to batter corporate profits. European shares put in gains on the back of some positive results, but Asian shares fell to four-year lows and emerging markets were...

Emerging nations hit by growing debt fears By David Oakley in London Published: October 14 2008 03:00 | Last updated: October 14 2008 03:00 Investor fears over the risk of many emerging market countries defaulting on their debt have risen sharply as Iceland's financial collapse has hit sentiment, discouraging funds from investing in these economies. The market is pricing the risk of default for countries such as Pakistan, Argentina, Ukraine and Iceland at 80 per cent or higher as their banking systems come under increasing pressure due to the credit crisis. Trading in credit default swaps - a form of...

Commentary: BRIC is broke, and emerging markets are discouraging By John Prestbo Last update: 7:29 p.m. EDT Sept. 17, 2008 NEW YORK (MarketWatch) -- Many investors turned to emerging markets last year because those economies kept sizzling even as developed economies began cooling. Some pundits opined that emerging markets were the new global growth engine and that their momentum could save developed economies from sliding into recession. Indeed, that view held up for a while. In 2007, the Dow Jones Wilshire Emerging Markets Index rocketed up 45.4% on a total-return basis, while the DJ Wilshire Developed Markets Index gained 9.5%....

Investment column: Do not put all your eggs in emerging markets basket Tom Stevenson Last Updated: 1:19am BST 01/05/2007 A week can be as long in the markets as in politics. Last Wednesday I heard a compelling investment case for emerging markets from Barings Asset Management. Then, yesterday, one of the better-performing of those markets, Turkey, showed why they are sometimes defined as "investments from which you can't emerge in an emergency". So who's right? The new-world-order bulls who argue that the four-year emerging market surge is still in its infancy, or the investors who yesterday wiped more than 8pc...