Point of Maximum Pessimism: Time to Buy Europe?

Morningstar analyst Alastair Kellett outlines how to benefit from a possible rebound in European equities

Alastair Kellett 9 May, 2012 | 2:27PM

Things are awful in Europe right now and everybody knows it. A number of countries have fallen back into recession; others have debt-to-GDP levels in excess of 100%. Ireland and Portugal have had to be bailed out by the European Union and the International Monetary Fund, and Greece has seen a full-blown restructuring of its debt. Amidst all this, many European banks are being dragged down by their exposure to the debts of these countries and some are struggling to stay afloat. There is palpable fear that if Spain or Italy or France wavers, the contagion effects could do irreparable damage.

With all this going on, it certainly sounds as though Europe is a terrible place to invest.

But it’s important to note that everyone already knows that the situation is awful. Market commentators discuss it every single day, as do people in restaurants and on buses. In fact it’s hard to imagine sentiment concerning the region being any more negative.

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The information contained within is for educational and informational purposes ONLY. It is not intended nor should it be considered an invitation or inducement to buy or sell a security or securities noted within nor should it be viewed as a communication intended to persuade or incite you to buy or sell security or securities noted within. Any commentary provided is the opinion of the author and should not be considered a personalised recommendation. The information contained within should not be a person's sole basis for making an investment decision. Please contact your financial professional before making an investment decision.

About Author

Alastair Kellett

Alastair Kellett  is an ETF analyst with Morningstar Europe.

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