European Stock Market

xnetco

Hello All,

What do people think about investing in Europe? Is it too late or still worth putting some capital in?

Tim

dunstonh

At risk of boring the regulars, then European investment should form the part of any diverse portfolio with amounts that are appropriately balanced to match your attitude to risk.

Certain areas of Europe offer great potential whilst others look a little weak or unknown. Not sure why you would think it is too late. It is never too late. Even if you had invested the highest point before the 2001/2 crash, you would have doubled your money now on a medium risk sector allocated portfolio (although you may have dropped back to around 95% in the last week ). There is no apparent bubble unique to Europe.

Jake'sGran

xnetco wrote:

Hello All,

What do people think about investing in Europe? Is it too late or still worth putting some capital in?

Tim

I invested in Fidelity European fund, about £1500 in 1998 and £1600 approx this year and today it is worth £6500. So I am quote pleased with it's growth in value. You need to do some comparisons with other European Funds and look at the charts to see which have done well. Have a look at Citywire or someone similar. I will be staying with my investment as I tend to go for the long haul. I don't think you will get advice on here about particular types of investment but you could look for opinions about Europe on the various funds group sites.

RayWolfe

I belive that one new factor in the European sector is the availability of income funds which makes it more attractive to me who, is too old for growth funds. ;-)
Ray

Chrismaths

The search for yield (income) is a huge trend in the market. Over the past year, we've seen fund launches targeting income in Europe, Asia Pacific ex Japan, Japan, Global, Canada, Property, global property, european property, and even commodities. Strangely not yet the US - but the US tax system rewards companies that reinvest in their businesses rather than pay dividends so that does make sense.

I like companies that pay dividends, it puts a discipline on the capital management of a company, and it's harder to fake cash flows than it is earnings (think Enron, Worldcom, etc). However, it does make it harder for a company to grow, and the weight of money flowing towards income producing assets makes it feel as though good quality growth companies are becoming relatively cheap - so is growth the "new value"? I don't think it matters - I think that a mixture of growing, reasonably priced companies and cheap, undervalued companies is a sensible way to go. Focussing purely on "value" or "growth" or "income" seems a bit wrong headed - it should be total return that interests us.

Jake'sGran

RayWolfe wrote:

I belive that one new factor in the European sector is the availability of income funds which makes it more attractive to me who, is too old for growth funds. ;-)
Ray

I too have not been much interested in growth although most of my choices have done well in that regard. I was considering investing my mini ISA equity money this year in Invesco Perpetual High Income....again. Is there anything wrong in investing in the same fund more than once?

Jake'sGran

Chrismaths wrote:

The search for yield (income) is a huge trend in the market. Over the past year, we've seen fund launches targeting income in Europe, Asia Pacific ex Japan, Japan, Global, Canada, Property, global property, european property, and even commodities. Strangely not yet the US - but the US tax system rewards companies that reinvest in their businesses rather than pay dividends so that does make sense.

I like companies that pay dividends, it puts a discipline on the capital management of a company, and it's harder to fake cash flows than it is earnings (think Enron, Worldcom, etc). However, it does make it harder for a company to grow, and the weight of money flowing towards income producing assets makes it feel as though good quality growth companies are becoming relatively cheap - so is growth the "new value"? I don't think it matters - I think that a mixture of growing, reasonably priced companies and cheap, undervalued companies is a sensible way to go. Focussing purely on "value" or "growth" or "income" seems a bit wrong headed - it should be
total return that interests us.

I was thinking of investing in individual shares for the dividend. Two I have thought about are United Uilities and Lloyds TSB. There was an interesting article in this weeks Sunday Times Money about Anthony Bolton's way of looking at things.

dunstonh

Im not sure LTSB would be a good example though. Take a look on the internet for concerns over LTSB shares.

RayWolfe

Jake'sGran wrote:

I was considering investing my mini ISA equity money this year in Invesco Perpetual High Income....again. Is there anything wrong in investing in the same fund more than once?

No problem if it's as good as the fund you mention. I have 20% of my equity investment in it. Started in 1997, wish I had done more but eggs and baskets and all that. ;-)
Cheers
Ray

Jake'sGran

RayWolfe wrote:

No problem if it's as good as the fund you mention. I have 20% of my equity investment in it. Started in 1997, wish I had done more but eggs and baskets and all that. ;-)
Cheers
Ray

I have a lot of years ISA allowances in equity income from half of which I don't take the income but I don't think the others do as well as Invesco. They are Jupiter and Credit Suisse. I was thinking of changing the last one

Chrismaths

Credit Suisse have changed the manager several times since 1997 - originally it was Bill Mott (who was a bit of a guru), then Leigh Harrison, who left for Threadneedle recently, now it's a guy called Errol Francis. I've not been impressed by either of the last two managers.