Jason Zweig: Hold Your Nose And Buy Europe

Ted

FYI: As investors search for bargains in a world of overpriced assets, they should be guided by the EMH.

That isn’t the Efficient Market Hypothesis, which holds that the price of a security reflects all available information. It’s my own Emetic Market Hypothesis, which says if the mere thought of owning an asset turns your stomach, that’s probably a sign you should buy
Regards,
Ted
http://blogs.wsj.com/moneybeat/2016/05/27/hold-your-nose-and-buy-europe/

slick

I have been holding what is effectively mostly Europe: OAKIX, have been patiently waiting for some sign of positive return, starting to get a bit disappointed in this fund. But I know if I sell it, that's when the rebound will happen. I am sure there are other members holding this fund wishing and hoping. Ok Ted, you can put in a link for Dusty Springfield here

Chinfist

slick said:

I have been holding what is effectively mostly Europe: OAKIX, have been patiently waiting for some sign of positive return, starting to get a bit disappointed in this fund. But I know if I sell it, that's when the rebound will happen. I am sure there are other members holding this fund wishing and hoping. Ok Ted, you can put in a link for Dusty Springfield here

I gave up on OAKIX and sold it a few months ago due to its underperformance. I put that money into ARTGX and AGLOX (for my international exposure these days I mostly go with global funds rather than strictly international funds). Other funds I have with European exposure are ARTRX, GPROX, OBIOX, VMVFX, QVGIX, and GAOAX.

davidrmoran

I switched to FOSFX when Herro went vocal against manmade global warming, not that it's been anything other than flat since then.

jlev

That was when I switched out as well

AndyJ

I gave up on OAKIX and sold it a few months ago due to its underperformance. I put that money into ARTGX ....

Looks like ARTGX is back to its winning ways. I was beginning to wonder there for a while.

slick

I also hold ARTGX and have been pleased with it. I too like global funds, as I also hold IWIRX, although a current underperformed but will hold on to see whether it can go back to winning ways. At least my small cap intl seems bright, so not all of my foreign exposure is in the dog house. Intresting to note that my global funds are mostly domestic, I'm hoping as foreign picks up more allocation will switch to foreign. Not an easy market to be patient in.

DanHardy

The way to play foreign stocks is dividend paying stocks and bond funds. The ZIRP of the foreign FEDs will continue making those instruments more valuable in their countries. The risk in the short to mid term is that the USA FED will raise rates making the dollar stronger and bringing foreign money into USA bonds.

In the longer term European exporting companies probably will not fare well when you consider the competition from Asia. What will do well are companies that focus on the tourist trade with a weaker Euro and a lot of rich Asians traveling.

BenWP

I have never gotten an overweight regional investment right, whether LA, Asia, or Europe through MFs, ETFs or CEFs. Now I let the managers of FMI, Artisan, Lazard, Seafarer, and Grandeur Peak, etc make the calls.

davidrmoran

A year and a half later, is this any less true?

http://www.usatoday.com/story/money/2015/01/16/investing-international-funds/21825245/

Ted

@MFO Members: Put the Linkster in the John Bogle school of foreign investing. You get all the foreign exposure you need by owning the S&P 500. However, if you must invest across the pond no more than 10-20%.
Regards,
Ted
http://www.marketwatch.com/story/sp-500-companies-generate-barely-over-half-their-revenue-at-home-2015-08-19/print

AndyJ

davidrmoran said:

A year and a half later, is this any less true? http://www.usatoday.com/story/money/2015/01/16/investing-international-funds/21825245/

Leave it to J. Wag. to nail it: "In any event, you need two factors for an international fund to beat the U.S. First, you need international markets to fare better than the U.S. Second, you need the dollar to fall against foreign currencies."

The last time both of those were running in the right direction for a U.S. investor was in the 'noughties, and it lasted long enough that even I realized it and made $ hand over fist in plain old VEURX and TRP's EM stock and bond funds:

https://research.stlouisfed.org/fred2/series/DTWEXM (set the time frame to "maximum")

No wonder that over the last 5y, currency-hedged FMIJX ranks in the top 1% of foreign large blend funds (that, and very little invested directly in EMs), but as good as the FMI guys are, it still trails the S&P 500 by a lot.