Tuesday, 11 February 2014

Buy Europe! The ECB will have to give the Euro economy a boost

Why you should buy Europe now, before the ECB acts

Yes, I know that you may be hesitant to buy Continental European stock market exposure, given the travails of the Euro zone since 2008. And you would be right to object that the Euro zone sovereign crisis has by no means been definitively solved, with debt loads of countries such as Portugal, Spain and Italy still pretty enormous.

This is all true and I wouldn’t dream of denying any of these facts. But hey, if you are to look at sovereign debt mountains, then you wouldn’t invest a single penny in the US, Japan or the dear old UK! The final exit from the sovereign debt mountains amassed both before and during the last financial crisis will take a very long time for the respective governments to unwind, as noted by the economists Rogoff and Reinhardt in their seminal tome “This Time is Different” (although there have been some subsequent issues raised concerning their calculations).

What I would argue is that there are a number of green shoots poking through for the Euro zone economy, which should be a harbinger of better days ahead. Added to this, I am a firm believer that the European Central Bank (the ECB for short) will need to stimulate the Euro zone further in the months ahead, which should be unabashed good news for the European stock market. And you have a chance today to buy into relatively cheap European stocks before the ECB unleashes one of their economy-boosting “big bazookas”.

Euro Confidence Is On the Up

Whether you look at leading economic indicators or  economic sentiment indices like the Sentix economic confidence index highlighted below (Figure 1),  the improving macro trend is clear...

Please click on the MindfulMoney website link below to read the entire article, see the charts and also the ETF and investment trust suggestions at the end:


All the best,

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