European stocks have too often been overlooked recently as a great investment option, especially when looking for an option that offers the potential for high returns while still providing a degree of diversity for safety compared to being fully invested in American markets. Read on for five reasons to be bullish on European stocks right now.
#1: European Markets Are Doing Great
Everyone is paying attention to the long winning streak of American markets that has been going on for several years now, however European markets have bounced back, as well. In fact, many of the European markets in the last 4-5 months have even managed to outperform their American counterparts. The market is strengthening and now is a good time to get in on that strong growth.
#2: Sometimes Regulation Is a Good Thing
European markets are known for generally being more regulated than many markets in other nations. While this can sometimes be seen as a disadvantage because it limits breakout potential, post-2008, and post-Brexit, the idea of having corporations proven in a system that is tighter and less likely to be shaken by a major economic catastrophe.
That degree of safety or perceived safety of the companies putting out stock can be seen as an investment positive in today’s markets and is often seen as a plus since there’s a degree of built-in shock resistance.
#3: Weathered the Brexit Shockwaves
While all kinds of “Woe is the world” headlines have been in the papers and news about the effects of Brexit and the initial hits to the markets, many people have ignored the fact that the markets have done just fine since then. Whether looking at Germany, France, or Britain, three of the largest markets in Europe, all of them have increased by double digits in value since riding out the initial Brexit shockwaves.
In other words, even with a major shocking event such as Brexit, the European markets have already absorbed that shock and are doing just fine.
#4: A Weaker Euro Means Opportunity
The Euro remains relatively weak as a currency and this gives additional opportunity. Buying European stocks while the currency is relatively weak means you will gain value, possibly significant gains in profits and value when the Euro turns around and strengthens once again. This is one of those stock buying opportunities that won’t be around forever. A stronger Euro will be great for investors who already bought in and be a new wall for those who waited too long.
#5: European Stocks Earnings Are Looking Great
One of the things that held back European stocks a bit in recent times has been lower earnings reports. However, the bottom of that slump is clearly behind them, and the earnings and returns reports are beating predictions in addition to showing a strong bull market strength that doesn’t typically appear during a short term or false recovery. When looking at the new earnings numbers, it’s hard not to get excited at where the markets are going.
There’s no denying it. European stock markets are offering quite the opportunity to those who are wise enough to take advantage.