Peter Brown spoke about the opportunities of investing in Europe and the challenges facing investors in US equities during Tuesday evening's webinar.
Opportunities in Europe
European shares in terms of their book value, and a number of ratios are a great opportunity for the value investor. In fact they are, in many instances, available at half the value of their US equivalents.
Peter believes, despite Brexit, sterling long term is undervalued and thus if you are buying a share denominated in sterling, you are getting a discount making, in his opinion UK ,attractive for value investors also.
This New York Times article discusses further Europe becoming attractive again for investors such as Blackrock with it's stocks undervalue in comparison, a comparatively better corona-virus case situation and better than expected unity among member states in finding economic solutions.
In contrast he spoke about some of the headwinds facing the American economy and equities:
Challenges in the US
The upcoming election signals uncertainty for US equities. Political allegiances aside raising taxes may be on the cards and the market may not like this initially.
Tech: how is the US going to recoup the TRILLIONS of dollars in funds released to help stimulate the economy? The taxation of tech firms could be an easy win for this and we have seen in the past how the market reacted to the threat of high taxation with Microsoft.
Depreciating dollar: every time you are crystallising a gain in your US investments and returning to euro you are getting a reduced return as the value of the dollar decreases. The outlook for the dollar is an important factor with a US portfolio. Now is not a good time for owing dollar denominated stocks.
Stocks such as Tesla are among the reasons for the continued rise of the US stock market. However Peter took a dim view on Tesla, positing that investing in such stocks is in line with a Juncker strategy i.e. you could lose or make serious money and that level of volatility does not sit well within an investment portfolio. The majority of analysts contributing to this piece believe Tesla to be overvalued.
Peter will be exploring the investing outlook further along with insights on how to build a portfolio, a review and explainer of various asset classes, cutting down unnecessary costs on investments and pensions to improve returns and lot's more during his Investing Fundamentals course which starts on Tuesday September 8th - more info here.
As always the above should not be considered financial advice or recommendations and please do your own independent research and speak to an independent financial advisor before making any investments.