Author Topic: Are we seeing a golden opportunity with European Index funds?  (Read 3076 times)

aschmidt2930

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Are we seeing a golden opportunity with European Index funds?
« on: October 02, 2014, 11:18:49 PM »
Over the course of the last month we've seen the dollar continue to gain in strength vs the Euro, while all major European Indexes have taken sharp falls in price.  If these trends continue, we could be seeing stocks at very low prices, with the ability to buy more stock per dollar than we're accustomed to.  A strong dollar should give European exports a boost as well.

Opinions?
« Last Edit: October 02, 2014, 11:41:42 PM by aschmidt2930 »

wtjbatman

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #1 on: October 03, 2014, 06:07:02 AM »
Value investing is a well known and popular concept, and in the past has resulted in greater returns overall. There's a reason even the Bogleheads forum has an active subset of people who tilt their portfolio to value index funds.

foobar

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #2 on: October 03, 2014, 07:23:04 AM »
Over the course of the last month we've seen the dollar continue to gain in strength vs the Euro, while all major European Indexes have taken sharp falls in price.  If these trends continue, we could be seeing stocks at very low prices, with the ability to buy more stock per dollar than we're accustomed to.  A strong dollar should give European exports a boost as well.

Opinions?

You can make counter arguments where the fall is a result of poor economic expectations, demographics, and political risk.  15% drops are in the normal variance. Get a 30-40% drop and you can start wondering if people are overreacting to the bad news.

That being said most of my dollars this year have been going international.

sb_NoVA

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #3 on: October 03, 2014, 10:04:20 AM »
@foobar - by international, are you referring to VTIAX or more focused markets?

foobar

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #4 on: October 03, 2014, 11:09:06 AM »
@foobar - by international, are you referring to VTIAX or more focused markets?

Any of them. They are all struggling to various degrees. Europe has slightly different problems than developed asia and the emerging markets have a different set.  I am sure if there was a Ukraine ETF it would be way down (getting invaded tends to have that effect) but you have to decide if that is a market overreaction or a proper assessment of the risk.

Again, I am not saying they are bad investments. But they are not clearly underpriced. Maybe in another 2 weeks:)

aschmidt2930

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #5 on: October 04, 2014, 11:47:51 AM »
@foobar - by international, are you referring to VTIAX or more focused markets?

Any of them. They are all struggling to various degrees. Europe has slightly different problems than developed asia and the emerging markets have a different set.  I am sure if there was a Ukraine ETF it would be way down (getting invaded tends to have that effect) but you have to decide if that is a market overreaction or a proper assessment of the risk.

Again, I am not saying they are bad investments. But they are not clearly underpriced. Maybe in another 2 weeks:)

Yes, my thought process here is that if these trends continue European stocks could get attractive for Americans in a hurry.  What do you think about European intermediate to long-term growth?  The demographics are definitely a concern, but my assumption is immigration reform will help offset the ageing population in the future.  As the US QE policy has started to show tangible success (For now at least), I have a feeling Draghi is going to continue to see more pressure to follow suit, and we've all seen what that has done to American equities.


Le Barbu

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Re: Are we seeing a golden opportunity with European Index funds?
« Reply #6 on: October 04, 2014, 06:50:03 PM »
Dont bother with curencies. Make your decision based on your target % allocation . Much more simple !