The conventional wisdom is that emerging markets such as China and Brazil are riskier than developed markets such as the United States or countries in Europe. This is why most classically trained financial advisors would advise even the most aggressive investor to weight his or her equity exposure toward the U.S. and other developed markets.

To wit, the Fidelity Freedom 2050 Fund (FFFHX), designed to meet the investment needs of someone who aims to retire in 2050 (ergo is 25 years old today), has just 20% international exposure -- less than 3% of which is to emerging markets.

This would make sense if emerging markets were places where good money goes to die, but are they?

Let's go to the videotape
Think about the type of market in which you'd like to invest. Chances are you'd want robust growth and low debt. Now take a gander at the relevant statistics from these five markets (which will remain nameless for the time being):

Metric

Country 1

Country 2

Country 3

Country 4

Country 5

GDP Growth

(2.4%)

(4.3%)

(5.0%)

8.7%

0.1%

Public Debt (% of GDP)

40%

69%

77%

18%

47%

Total Debt (% of GDP)

300%

466%

285%

159%

142%

Data from 2009. Sources: McKinsey Global Institute and CIA World Factbook.

I don't know about you, but countries 4 and 5 look far more attractive for investment than countries 1, 2, and 3 on a relative basis.

Who's who? Take another look:

Metric

U.S.

U.K.

Germany

China

Brazil

GDP Growth

(2.4%)

(4.3%)

(5.0%)

8.7%

0.1%

Public Debt (% of GDP)

40%

69%

77%

18%

47%

Total Debt (% of GDP)

300%

466%

285%

159%

142%

Data from 2009. Sources: McKinsey Global Institute and CIA World Factbook.

As it turns out, the world's developed countries are finding themselves more and more on financially unstable ground. And emerging markets are looking better and better. This revelation prompted PIMCO bond guru Bill Gross to metaphorically declare in his March investment outlook that “The Kings [developed markets] … in the process of increasingly shedding their clothes, begin to look more and more like their subjects [emerging markets].”

Where does that leave us?
I wrote way back in 2008 that there is no such thing as a low-risk stock. My evidence for this was that supposed blue chips -- companies such as Citigroup (NYSE: C), General Electric (NYSE: GE), and American Express (NYSE: AXP) -- dropped more than 50% that year. This performance was just as bad ,if not worse than, that of emerging-markets stocks such as China Mobile (NYSE: CHL), PetroChina (NYSE: PTR), and Petrobras (NYSE: PBR).

The difference, however, is that investors knew what they were getting into when they purchased stocks in China and Brazil; they had less of an idea when they bought the supposed stalwarts. But now we know that blue chips can be dangerous and that developed markets such as the U.S., the U.K., and Germany are putting themselves in an ever more precarious state by piling more debt onto their books.

Investors, however, aren't adjusting, and woe to the poor 25-year-old Fidelity investor who's saddled with less than 3% emerging-markets exposure for the next 40 years. (Hint: If that's you, augment your portfolio with Vanguard Emerging Markets Stock (NYSE: VWO).)

The undeveloping world
Ground zero of this reversal of fortune for the developed world is Greece -- an EU member crippled by public debt that today represents 108% of its GDP. This has put that country wildly out of compliance with the standards that make it eligible to use the euro as its currency. In response, the Greek government is pushing through significant tax increases and spending cuts that have set off waves off protests in Athens, the country's capital city.

Furthermore, Greece may be only the first shoe to drop. Spain, Portugal, and Ireland -- euro countries all -- are struggling with lagging economies and rising debt. In a better year, a bigger player like Germany might be able to step in and save them, but Germany is not in spectacular financial shape, either.

All of this could lead to a fundamental change in the value of the euro. Given that it's one of the world's three functional reserve currencies, that would mean ripple effects throughout the global economy, and in your investment portfolio.

Of course, there are also signs that this is much ado about nothing. Greece recently sold almost $7 billion in bonds, and there was demand in excess of that. Further, Alpha Bank chief economist Michael Massourakis proclaimed in a recent Wall Street Journal article that “The Worst Is Over for Greece,” citing the health of Greek banks and rising private savings.

What this means for you
If the developed world continues to more and more resemble the "risky" developing world, then your investment dollars would be better off in those higher-growth economies. If, however, the crisis is averted and the euro rebounds, then bargains are to be had in Greece and elsewhere across Europe.

Where do I stand? I don't know yet. That's why our Motley Fool Global Gains research team is traveling to Greece next week. We want to get on the ground there to determine just how real the crisis is and if the government has the will to follow through on its austerity plans. From there we'll be able to determine our own course of action and the means by which we can both protect ourselves and profit from these historic events.

If you'd like to follow along on our trip and get our real-time updates from the field, just tell us how to keep in touch by providing your email in the box below.

Tim Hanson is co-advisor of Motley Fool Global Gains. He does not own shares of any company mentioned. American Express is a Motley Fool Inside Value pick. Petroleo Brasileiro is an Income Investor choice. The Fool owns shares of China Mobile and Vanguard Emerging Markets Stock ETF. The Motley Fool's disclosure policy is standing firm.