Hello people,
I am considering investing in Europe rather then in US. Because in my personal opinion US stock market is affected by multiple factors example Trumph, US China tension in south china sea, Coronavirus, Unemployment claims, their GDP result which is due in 2 days, Riots etc and many more.
I personally think that $$$ will be dropping very soon as Golden Ring countries (for at least now) are going to ditch dollar they include China, Pakistan, Iran, (Iraq, Afghanistan,) Turkey, and Russia. So I was looking for some advice, what do you guys think about this analysis or whatever you may call it… Which EU countries should be good for investment.
You may be interested in investing in Euro Stoxx 50 or EuroStoxx 600 ETF. This index includes companies from many European countries. Look at the sectors, I seem to remember they are quite heavily exposed to banks and energy companies, which you may or may not like.
In terms of specific european countries, Germany and the Netherlands tend to have strong stock market. Their main indices are the Dax-30and Aex-25, if your “main currency” is not the Euro, but the Pound, Dollar, etc then consider the currency risk, however the Euro may also appreciate in the coming months increasing the value of any investments in Euros.
An ETF that may be interesting if you are a long term investor interested in factor exposure to value and small cap stocks could be the “SPDR European Small Cap”, which is on T212.
Well first of all thanks for reading and then replying to my comment in detail. How would it affect the Europe? is it because Europe is allies with US or you mean because EU will also be sending their armies ?
However, the USA represents now half of the world market capitalisation, hence whenever the USA stock market goes down European stocks also go down. Another reason is that it is a very big market and many European companies have interests there, whether it is financial companies, utilities, industrials, etc. In the same way lots of USA companies have large interests in the EU, including Tech such as Apple/Microsoft/Amazon/Netflix, consumer products such as Coca-Cola or Kellogs, industrials such as Ford or financials such as investment banks. The world is very much connected, particularly amongst the most developed economies.
If for example the USA has very large problems, due to Covid-19 or otherwise, and Europe does not, the European stock market would probably do significantly better, but it would be likely that neither of the 2 would do very well.
Regarding your comment on the US Dollar, I would like to see European currencies, in particular the Euro becoming the “go to” currency worldwide in the near future, however it currently does not seem very likely, at least not in the short term. For example, with most debt worldwide issues in Euros, most ETFs listed in Euros and the Euro being the benchmark for most currency exchanges worldwide… it may happen one day, but not soon. I think that for that to happen the EU has to become more united and move towards being more of a federation and less independent states.
From my previous posts I may not have been clear that i agree with you. I definitely hope European stocks outperform, but ithey don’t have to and in my opinion there is limited indication that they will.
I am overweight in European stocks, but that is simply because I know more about them and understand them much more, hence I am more confident in them.
Also, European stock are currently lower than USA stocks both compared to the pre-Covid levels and in terms of Price to Earnings, however the market in recent years tends to be more bullish on USA stocks with higher growth. What I do hope is that the trend reverses ad value stocks start to rise, which should benefit the European markets more.
I am “overweight” in the British, French and Spanish stock markets and will continue to be, with some other interests in the German and Dutch markets which I intend to build upon. I am also interested in some other European stocks but T212 does not have access to them yet, hopefully they will have access to them soon
What do you mean?
Companies that the spanish government has shares in such as Bankia, Airbus (as well as the French and German governments) and Red Electrica?
not too sure these countries will ditch the US dollar as much as is being predicted. this has sort of been a call for many years now and still hasn’t happened. US dollar is just to widespread for so long that the amount held in reserves would crash the value far too much in trying to ditch it, basically making it harder to exchange for other currencies. I’m personally taking the opportunity to invest a little more heavily in the US stocks compared to my UK ones to capitalise on such high exchange rates for my portfolio average a year or 2 down the line as things stabilise.
For EU countries to put your money, focus on the good companies rather than just which country they are available/from since there’s a lot of bad, but few buried gems. I would personally take a look in Germany in light of some of the recent events, it’s where a lot of EU money seems to reside in my eyes, which seems promising. for Europe as a whole, the UK still has a pretty good offering if you know where to look, despite all this madness and turmoil things will eventually settle and begin to move forwards.
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