Buy Europe’s Unloved Banks While They’re Cheap

We’ve certainly seen the effects in our Total Wealth Insider portfolio, where one of our banking stocks geared to Europe is up nearly 40%.

And I still like the prospects for Europe-focused exchange-traded funds (ETFs), especially those geared toward the financial sector, like the iShares MSCI European Financial Sector ETF (Nasdaq: EUFN), which I recommended on this page in August. Since then, it’s up 10% and has more to go.

With the U.S. stock market at all-time highs — and at stretched value levels not seen since 1929 and 1999 — there’s never been a more important time to diversify your profits from stocks outside America’s borders. European stocks, for instance.


The same can be said for the Vanguard FTSE Europe ETF (NYSE: VGK), which I recommended here back in October last year. It’s up more than 7%.

European Stocks Are Cheap

European stocks also remain a place to find a better value compared to the U.S.

Recently, global value maven Ed Yardeni’s team updated their price-to-earnings ratios for indexes representing the U.S, Europe, Japan and the U.K.

They found a curious fact: Out of the world’s four major advanced economies, Europe remains the cheapest market to invest in. The U.S. market remains the most expensive.

Lastly, we are nearly a decade into a full-on runaway bull market. I believe we could see a large sell-off starting in the market any day now as investors finally cash in profits from the past year. It will scare a lot of people, no doubt.

Europe’s cheaper stock markets are a great place to “hide out” when that sell-off finally gets underway.

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