Selling investments is about telling stories. If you can weave a convincing yarn about how an investment will pay off in future, it is much easier to persuade people to buy into it.

The narrative of the Brics (Brazil, Russia, India and China) is a classic example.

The story tells of how the largest emerging markets will steadily overtake the world's current dominant economies. Economic growth will propel them to take over economic leadership by the end of this century. Therefore, the story goes, buy stocks in the Bric nations.

Unlike many other stories that investment managers tell their clients, this story has the benefit of being true, at least so far. When Goldman Sachs first introduced the concept in 2001, China's economy was due to overtake Germany's in 2008. It did, on schedule. The future remains unknowable, but the central narrative has unfolded just as it was supposed to do, so far.

But this story still has a flaw. Economic growth does not necessarily translate into stock market appreciation. Indeed, recent strong economic growth might even translate into poor stock market performance in the near future.

That, at least, is the message from the latest issue of the Credit Suisse Global Investment Returns Yearbook, an ever-impressive annual research project from Elroy Dimson, Paul Marsh and Roy Staunton, three academics at London Business School. They reviewed history and made a comparison with the most popular styles for picking stocks. When picking a country, they argue, a value style should work much better than a growth style. In other words, the thing to do is to find countries that are beaten down and out of fashion, rather than countries that are booming.

This is bad news for emerging markets proponents as the name for the asset class emphasises the notion we can catch a country in the explosive growth phase when it is emerging to become fully developed - just as growth investors try to spot companies as they are entering their period of significant growth.

David Fuller's view We can expect to hear more of this in the west, partly because it may engender a feel-good factor. There is no harm in that provided it does not lead to complacency and sloppy analysis. After all, one can prove anything with statistics, or as the 19th century American humorist Mark Twain said: "There are three kinds of lies: lies, damned lies, and statistics." People become attached to statistics, so don't be surprised if someone wins a Nobel Prize in Economics for this lightweight research.

Most stock markets move in overlapping cycles, most of the time, responding to Wall Street's directional pull. Yes, it is better to buy a beaten down low-growth market than a soaring high-growth market. However I would much prefer to buy an oversold high-growth market for recovery. Moreover, I would prefer to hold that high-growth market until it had done so well that it created partial catch-up opportunities elsewhere.

Since high-growth markets generally outperform in a global stock market recovery, they will also underperform during the next downturn as people lock in profits. If our measurements of relative performance commence at the top of a bull cycle, the results will be skewed in favour of low-growth performance until at least well into the next recovery.

Where high-growth can come unstuck, other than in cyclical downturns for equities, is when strong GDP data is not backed by high profits. For instance, there was a period in South Korea's development, commencing in 1970s as I recall, when the government not only emphasised export growth but also market share at the cost of profits.

This led to the formation of Korea's chaebols (large conglomerates) which were encouraged to expand production and undercut the competition's prices, in hope of gaining market share. The theory was that if you could survive long enough to wipe out the competition, you would be much more profitable later on. Many companies have tried a similar approach over the decades, not just in Korea. Needless to say this profitless prosperity has not always been successful.