A weakened water supply in Latin America has been squeezing 2014 earnings for AES. Management expects a negative impact of $0.1 per share in the full-year earnings.
Emerging market debt is still a volatile asset class when compared to more traditional fixed income investments. As such, allocations to this asset class will largely be a function of an investor’s individual risk appetite.
Sometimes terrible things happen, and it’s not exactly clear when they’re going to happen. So you just have to think: Is the market priced for perfection? Is there some cushion in prices if an exogenous event occurs out of the blue?