A Message from Middle East Stock Markets?

Palestinian flag
Palestinian flag

Should it matter to U.S. investors that Middle East stock markets are among the worst-performers this year, with many trading at or near 52-week lows?

On the face of it, the answer would seem to be no. While a growing number of Americans are diversifying into foreign equities, funds have generally been directed toward the developed economies of Europe and Asia, or the larger, more advanced emerging markets like Brazil, Russia, India and China (the "BRIC" countries).

Still, while the performance of share markets in the Mideast might not be directly relevant to most Americans, I wonder if the recent trend should be viewed in some broader context. That is, are those markets, as a group, anticipating developments that might have more far-reaching implications?

If so, what might they be? While it's hard to say for sure, possibilities include:

Whatever the case, the fact that investors are heading for the exits in a traditionally unstable, but strategically important region of the world is a development that bears watching.