The Political Stock Market
Many economic and financial analysts complain that emerging countries' stock markets are often heavily manipulated by their governments and are more political than economic. The unstated assumption seems to be that, in contrast, some pristine force of economic nature drives stock markets in advanced countries, and that forecasting their performance is thus like forecasting the growth of trees.
This description of stock markets in emerging countries is not wrong, just biased, because the same description applies to stock markets in advanced countries. Indeed, the best analysts know that forecasting the performance of any country's stock market substantially means forecasting how well the government wants stock market investors to fare in the current political environment.
Consider the United States stock market, by far the world's largest. The general perception is that the government leaves companies alone and that the returns from investing in the US stock market reflect the fundamental forces of a strong capitalist economy. This is one reason why the US is a magnet for portfolio investors from around the world.