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Bob Carey
Chief Market Strategist
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  Don't Let One Bad Year Keep You From Owning Foreign Equities
Posted Under: International-Global
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View from the Observation Deck

  1. In 2011, a number of foreign equity markets posted negative returns due to the economic drag from events like the tsunami/earthquake disaster in Japan and proposed austerity measures in Europe.
  2. As the chart above indicates, while the S&P 500 managed to post a slight gain in 2011, the vast majority of foreign stock indices corrected, although they have significantly outperformed U.S. stocks since the end of the last bear market (3/9/09).
  3. We believe that earnings growth substantiates stock valuations over time and economic growth provides the underpinnings (macro basis) to corporate profits.
  4. Emerging/Developing economies are projected to grow (GDP) by an average of 5.4% in 2012 and 5.9% in 2012. Developed economies are projected to grow by an average of 1.2% in 2012 and 1.9% in 2013. (Source: IMF.org)
  5. As the orange bars in the chart illustrate, the fastest growing economies posted the highest total returns since 3/9/09.
Posted on Wednesday, February 8, 2012 @ 11:35 AM • Post Link Print this post Printer Friendly

These posts were prepared by First Trust Advisors L.P., and reflect the current opinion of the authors. They are based upon sources and data believed to be accurate and reliable. Opinions and forward looking statements expressed are subject to change without notice. This information does not constitute a solicitation or an offer to buy or sell any security.
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