Ask Matt: When will emerging markets stop falling?

Q: When will emerging markets stop plunging? 

A: If you've followed the advice of most financial planners, you've added emerging markets stocks to your portfolio. And if you're like most investors, you're probably angry about it.

Emerging markets have been the blemish on many a diversified portfolio. The Vanguard FTSE Emerging Markets exchange-traded fund (VWO) has fallen roughly 20% over the past three years - dragging down what's been a solid period for U.S. stocks. The U.S.-centric Standard & Poor's 500 is up about 30% during the same period.

Weak commodity prices have been brutal for companies in emerging markets. Many of the largest companies in these parts of the world are heavily concentrated in the commodity industry. Energy and materials stocks, together, account for nearly 16% of the weighting of the Vanguard FTSE Emerging Markets exchange-traded fund.

If anything, emerging markets stocks are living up to their reputation of being one of the riskiest major asset classes investors can buy. Emerging markets stocks, over the long term, have been 25% riskier than the S&P 500, says Index Fund Advisors. But the payoff is worth it, emerging markets stocks have generated 28% higher returns over the long-term, too.

Guessing when emerging markets will finally bounce is impossible. But you'll want to own the asset class when it does come back as painful as it might be now.

Paste BN markets reporter Matt Krantz answers a different reader question every weekday. To submit a question, e-mail Matt at mkrantz@usatoday.com or on Twitter @mattkrantz.