Will emerging markets falter soon?

Many analysts are now saying that emerging markets are the place to be in. However, this is exactly why it is so worrying to be investing in emerging markets now - for the sole reason that there is a lack of bears.

Individual investors are pouring money into emerging market stocks at the fastest pace since 2007. The last time investors were this bullish - the MSCI Emerging Markets Index sank 11%. The index now trades at 2 times net assets, within 4% of the most expensive level on record versus MSCI World Index. Non-conformist fund managers such as Harris Associates' David Herro and Jack Ablin are busily reducing their exposure to these markets. They are instead turning to US companies with strong exposure to emerging markets.

The implication: A more meaningful correction for Asian markets may be round the corner. In fact, the Hang Seng is now in the process of breaking down from its head and shoulders pattern, a bearish sign.

But I am still a believer in the Asian growth story, and will be keeping cash in reserves to take advantage of just such an opportunity, if emerging maket stocks falter.