The Black Friday Of Investing Opportunities

The Black Friday Of Investing Opportunities
Theodora Lee Joseph, CFA

over 1 year ago1 min

Mentioned in story

If you want to find the thriftiest bargains, you’ll usually have to do some digging. That applies to investing too: US stocks might have fallen this year, but they’re still far from a steal when you factor in that super low interest rates were keeping them at relatively expensive prices before that.

Now, rising rates are set to pull down US stocks for some time. But that’s not the case everywhere: Japan’s interest rates are unlikely to rise at such a rapid pace, and the country’s stocks are currently sitting near the tenth percentile of their 20-year valuation range. Just check out the chart above, and you’ll see how much cheaper Japanese and European stocks are than US ones – which, by the way, are currently hovering near the seventy-fifth percentile.

Goldman Sachs believes you could be in for strong returns in a year’s time when valuations fall below the thirtieth percentile. So with global stocks hanging closer to the halfway point, you might want to look toward Japan and Europe – specifically the UK – while you wait for the rest of the world to take a breather. After all, most of the lingering concerns for those countries’ outlooks have already been priced into their stocks. You can even hedge your currency risk if you pick an exchange-traded fund (ETF) like the iShares Currency Hedged MSCI Japan ETF (ticker: HEWJ, expense ratio: 0.5%), iShares Currency Hedged MSCI Eurozone ETF (HEZU, 0.53%), or the iShares Currency Hedged MSCI United Kingdom ETF (HEWU, 0.5%).

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Disclaimer: These articles are provided for information purposes only. Occasionally, an opinion about whether to buy or sell a specific investment may be provided. The content is not intended to be a personal recommendation to buy or sell any financial instrument or product, or to adopt any investment strategy as it is not provided based on an assessment of your investing knowledge and experience, your financial situation or your investment objectives. The value of your investments, and the income derived from them, may go down as well as up. You may not get back all the money that you invest. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment advisor.

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