This was a steady decline all month, only reversing somewhat in September. The last time we saw that pattern of behavior, it was Mexico. Stubbornly attached to a crawling peg, the peso became terribly overvalued with strong competitive implications. When the adjustment came there was nothing subtle about it, and the pain was severe to investors and the populace alike. The good news is that Mexico's adjustment was absolutely necessary and in the subsequent years with floating exchange rates, growth has been reestablished.
Interest rates have declined, investment continues and confidence is building in the equity markets.
The foundation on which Mexico stands today is much stronger than it was four years ago. First the wide variance in the equity returns of these countries speaks volumes about the importance of diversification and active management. Counting the currency effect, it is worse. Volatility is a fact of life here because the markets are less mature and efficient than their developed counterparts in Europe and North America. We can and should ignore day to day changes, but the quarter to quarter swings force us to thoughtfully diversify.