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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