The past year has been marked by two primary fears among investors: that the European debt crisis will spread, and that policymakers in the emerging markets will choke off growth with anti-inflation measures.

While the European crisis is yet to be fully resolved, emerging markets may regain some of the luster lost in 2011. What’s interesting is how investing in troubled Europe might be among the better plays on the developing world.

“[The emerging market] is a very good place to be for the long-term—we know there will be bumps along the way, but you have a lot of people whose standard of living is improving and they have greater demand for anything from cars to jewellery to entertainment,” says David Winters, founder of Wintergreen Advisers.

The key to investing in emerging markets is the same as in the developed world—to find companies that offer what he calls the Trifecta: improving economics; management that works for all shareholders; and a low price.

“China has made enormous progress; there is concern that there has been some excess in terms of building and consumption,” he says. “But if you think longer term, there are 1.3 billion people who want everything the West has,” he says. “The challenge is to find companies that you can feel comfortable with as a long term investor.”

One such example is Richemont, the corporate parent of luxury watchmaker Cartier. As the Chinese middle class grows, demand for luxury goods has soared, and much of the world’s luxury goods market is based in Europe.

“Reliable data has been, and continues to be an issue in China, so we have invested in companies that are either domiciled in the West or have reliable reporting. What we want to do is capitalize on China with a lot less risk.”

China’s moves to stave off runaway inflation have sparked concerns among some investors that policymakers will stall the economy, but Winters says the government has been “very responsible” in managing the economy.

“It shows a degree of economic maturity that has not been on display in every country around the world,” he says.