In one of our portfolios we recently moved into a fund covering the Europacific region. If you noticed a recent investment in AEGFX, the American Funds Europacific Growth Fund, you may be thinking, “Why more international? Why now?”

The beginning of 2019 has been very different than the end of 2018. Because international was down last year, this presents an opportunity to follow the age-old investment advice of buying low.

As US stocks have outperformed international the past few years, there has been growing pessimism for equities outside the US. When that sentiment hits a certain point and equity values have decreased enough, the price suddenly appears attractive.

The attached article was written in early December 2018 and is already proving true.

LINK: International outlook: Are we nearing peak pessimism on non-U.S. equities?

 

INTERNATIONAL OUTLOOK:  ARE WE

NEARING PEAK PESSIMISM ON NON-US EQUITIES?

Stop us if you’ve heard this one before:  Equity valuations outside the United States look incredibly attractive on a historical basis.  They have looked that way for quite a while and the gap is widening