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Bob Carey
Chief Market Strategist
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  No Guidance, No Confidence!
Posted Under: International-Global
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View from the Observation Deck

  1. When would be an opportune time to invest in European equities?  We get this question posed to us on a daily basis.
  2. As the chart clearly illustrates, the sell-off in most of the PIIGS (Portugal, Italy, Ireland, Greece & Spain) is at the heart of the problem.
  3. It also happens to be where some of the best investment opportunities could be once EU leaders announce a comprehensive debt stabilization package, in our opinion.
  4. Historically speaking, investors have often been rewarded handsomely by investing in the most beaten down areas of the market after a rebound commences.
  5. While we don't have guidance yet on "the fix" for the debt crisis, we can monitor government bond yields, and they still signal fear.
  6. 10-Year government bonds yield 24.39% in Greece, 10.08% in Portugal, 6.93% in Spain, and 5.97% in Italy.
  7. For comparative purposes, aside from the PIIGS, New Zealand has the highest yielding debt issued by a developed nation at 3.31%.
  8. Unless an investor is willing to accumulate a position in European equities over time, perhaps it is best to wait for more guidance.
Posted on Thursday, July 19, 2012 @ 4:12 PM • 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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