Emerging-Markets Stocks: 10 Ways to Play the Next Bull Market

Emerging markets have been a real minefield of late. The United States and China have ratcheted up their trade war rhetoric, and investors have been shunning emerging-markets stocks and sticking with the comforts of home.

But they may be doing so at their own detriment. Emerging markets are cheap after a decade of underperformance marked by sagging commodity prices, political instability and strong home-country bias by American investors.

For the contrarian investor willing to look past the headlines, testing the waters in emerging markets makes sense. U.S. stocks are as expensive as they were in the late 1990s by some metrics, while foreign markets in general and emerging markets in particular are cheap and unloved. If history is any guide, EMs should beat the pants off of American stocks over the next decade.

"There is no doubt that the U.S. stock market is expensive (though not quite a bubble like the 1990s), with foreign markets much more reasonable," explains Meb Faber, CEO of Cambria Investment Management and manager of the Cambria Global Value ETF (GVAL), among other funds. "Today, we find the most reasonable valuations in the beaten-down, emerging markets that sport a valuation roughly half that of the U.S. -- some countries are even clocking in with single-digit P/E ratios. "

Faber recommends that investors "close your eyes, hold your nose, and