With negative headlines around everything from refugees to elections to the euro, you could be forgiven for thinking Europe is still in crisis mode. The truth is negative headlines can obscure the larger picture.
Here are three reasons to stop discounting Europe.
None of this means it will be all clear sailing ahead. Fears over the future of the European Union may have diminished following far right candidate Marine Le Pen’s electoral loss in France. However, risks of a breakup are still relevant—and were incorporated into the scenarios we took into account when deciding on our portfolios’ investments in European stocks—but we are convinced they are outweighed by the compelling long-term opportunity. Based on the first quarter’s stock returns, markets are starting to bear that out. With the economy recovering, and the euro’s cheap valuation, we’re also now comfortable moving to an unhedged position.
As we’ve seen, particularly as of late, investor sentiment can shift quickly. Sitting on the sidelines waiting for the perfect moment to invest is a good way to miss opportunities, particularly in a market the size of Europe’s. We are constantly reevaluating our views, and we’re willing to ride out short-term swings as long as we believe they will play out in the long term. That’s also how we approach wealth management in general, always considering the bigger picture and how the individual pieces will work together to help our clients reach their goals.
Do you have more questions or want to discuss the topics covered in this post? Please call your Litman Gregory Wealth Advisor or contact us here.
A Decade Past, the Decade to Come
The last decade has seen U.S. stocks significantly outperform non-U.S. stocks, large caps outperform small caps, and growth strongly outperform value. And while the dominance of these trends has been unrelenting, we have already begun to see the last decade’s major market trends starting to reverse. In this post, we look back on the last 10 years and consider what to expect as investors over the next 10.
Litman Gregory Joins iM Global Partner
We would like to share some important and exciting news about our company’s future. After much due diligence and careful thought, the firm’s principals and founders have decided to take a significant step toward growing our resources and ensuring our ability to excel for generations to come by joining iM Global Partner, a privately held global investment services firm.