Investors are always looking for new investment opportunities, but many hesitate to invest in European equities due to a long period of crisis and market that is highly diversified in terms of stability. Some claim that European equities are not ideal for investments as there is still many uncertainties involved. Others believe that it is already over-crowded, which means there are too many people already investing in it. But is it really so?
Of course trading hugely popular equities like European equities that are seen as hot merchandise at the moment is not a smart thing. Being first is what matters, as it helps you maximize the profit. Still, there are several reasons why European equities are something you should place in your investment portfolio in near future.
Here are the reasons why European equities should definitely be considered.
- Unlike the US and the UK equities, European equities give you a chance to trade on momentum which happens v3ery often, and especially now when there is still place for them to grow.
- Some equities are always better than others. If you want to invest in European equities, take a look at German market, as there are some excellent companies to invest in.
- Specialists that predict market trends and professional investors are noticing rise in value of European equities in the near future.
Another fact that should be considered is elections in Europe that bring many news and interesting turmoils. For example, Dutch elections and recent elections in France improved European stability at a large scale, which helped avoid the panic that would be caused if extremist parties won. Political risk and factors involved with investing in European equities has been significantly reduced, if not completely diminished. Economies of the Eurozone are growing fast, so there is still time to jump the bandwagon and take advantage of European equities. The future seems optimistic as the financial growth of most EU financial markets is constant, even though slower that the UK or the US growth.
Another reason why you should invest in European equities is that the unemployment rate is finally dropping down. The numbers are still quite high, but are getting lower with every quartal. It is also important to note that European equities are at the highest level of discounts versus American stocks in the past 5 years. What stops investors from entering the EU equities market are potential political turmoils, that in most cases proved to be false alarms. According to experts European economy is moving slowly, but surely, towards better times and it could be said there is a boom, even though small, going on.
Also, besides the eurozone, there are also other territories to be taken into consideration such as Swedish market, or even Norwegian that is not part of the eurozone or European Union but is still highly integrated into it.
As always, European equities are not and should not be your only form of investment. Diversify your portfolio even when it comes to EU equities. Even though this is highly versatile market, make sure to have a backup plan, and as usual, start small and with great care and attention to details. European equities are still considered to be somewhat risky due to overall political atmosphere, but from global point of view, it is the right time to invest in them.