Mark Mobius: Here’s what investors need to ‘see through’ if they want to make money

Investors who run the other way when they hear negative headlines are making a big mistake, according to Mark Mobius of Franklin Templeton.

"Situations like we see in North Korea, what we're seeing in the Middle East will be with us for quite some time. But that doesn't mean countries don't continue to grow," he said in a Tuesday interview on CNBC's "Trading Nation."

"We're going to see continued growth," and investors should "see through" negative headlines to the underlying fundamentals, said Mobius, executive chairman of Templeton emerging markets group.

"If you look at the price charts, in dollar terms, for a place like Brazil or India [that] from one time to another has bad headlines, the reality is that stock prices continue to go up in dollar terms, so we've got to keep an eye on those prices," he added.

His remarks come as Bank of America Merrill Lynch's fund manager survey showed that investors are becoming more optimistic about the emerging markets, which include China, India, Brazil and Mexico. Investors "aggressively" bought emerging market stocks in April, propelling allocations to five-year highs, according to the report.

Looking forward, investors ought not to be deterred by a rising interest rate environment in the U.S., according to Mobius.

When considering investing in emerging markets, people have been "so afraid of higher interest rates, not realizing that higher interest rates in the U.S. don't necessarily mean a down market; sometimes interest rates go up and the markets go up. And this has been happening with emerging markets; emerging markets are going gangbusters," Mobius commented Tuesday.

While Mobius deemed India a strong pick out of the group, citing tax reform under Prime Minister Narendra Modi, he also sees opportunity in Brazilian equities.

The market is a "long way" from its five-year highs, he said, but he is highly encouraged by the reforms to be implemented in the months following the impeachment of former president Dilma Rousseff.

"Generally speaking, the long-term trend is very good," and pullbacks would present buying opportunities, he said.


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Brian Sullivan is co-anchor of CNBC's "Power Lunch" (M-F,1PM-3PM ET), one of the network's longest running programs, as well as the host of the daily investing program "Trading Nation." He is also a frequent guest on MSNBC's "Morning Joe" and other NBC properties.

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