The European crisis created lots of volatility, uncertainty, fear... but also opportunities. Furthermore, the Merkozy alliance is over and Europe may focus more on growth.
Great companies were founded during or shortly after a recession or a market decline (Texas Instruments in 1930, Samsung in 1938, McDonald’s in 1948, Walmart in 1962, Microsoft in 1975…).
Government Debt to GDP is much lower in emerging/developing economies. Furthermore, the age distribution is better.
While the Net Present Value of health care and pension costs grew to more than 200% of GDP for the U.S. (Vs. around 50% for France or Germany), U.S. stocks have more than doubled since March 2009. In the meantime, middle-class spending continues to grow and is expected to increase six-fold in the Asia-Pacific Region by 2030.
Adding international stocks to a U.S. stock portfolio will decrease the portfolio volatility.
Thanks to the 500+ of you who have read the Best of BFM Newsletter (click here), which summarizes the newsletters you enjoyed most in the last two years.
By now, you should have uncovered that financial decisions are not only driven by rationality but they are also strongly influenced by emotions. You also found out that your vision can literally “trick” you whenever it can (click here)!
