Tuesday, April 03, 2007

Europe tops US in stock market value -- FT

Whoa. Say what??

Fraid so. OK, well I have been saying that Americans should be investing more overseas. It's not a growth thing, it's a currency thing. The Euro's gains vs. the dollar have been responsible. That's a tailwind for the European portion of your portfolio, if the vehicle you use is unhedged. It's low-hanging fruit. A no-brainer. Enough cliches? If the large-cap growth portion of the US market does well, as may happen given its relative pricing, the US could pull ahead for a time, and beyond that, it's too murky for me to speculate further. Yet the thesis looks good, despite what you are about to read.


You know, sometimes the last paragraph or two of a story turns the whole thing on its head. Here are the last two paragraphs from FT:

"Europe trails the US on the indices of market capitalisation compiled by FTSE and MSCI and which are used by fund managers as benchmarks."

"However, these have a reduced or no weighting to shares that cannot be freely traded such as holdings of governments or controlling family shareholders. Europe has more companies with such stakes."


FT.com / Markets / UK - Europe tops US in stock market value

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