European stocks are the best non-U.S. assets to include in an investor’s portfolio today but Japan also offers opportunities for investors, according to INVESCO Services Inc. financial advisers Ingrid Baker and Allison Corbally.
Ms. Baker and Ms. Corbally provided an overview of global investment opportunities at a luncheon held at the World Trade Center Atlanta on June 14.
INVESCO is one of the world’s largest independent money managers and manages assets on behalf of its clients from more than 100 countries.
Of the 50-60 international companies an investor could pick for his or her portfolio, they said, European stocks may begin to earn the best return in the coming year, even though returns on U.S. equities have outperformed them recently.
They cited corporate restructuring, tax reform and pension privatization now taking place in Europe as the basis for their optimism about European returns.
Despite the country’s poor overall economic performance recently, Ms. Baker also advised that Japanese stocks not be overlooked because of positive political and bank policy reforms being undertaken there.
She added that the election of Prime Minister Junichiro Koizumi and a new cabinet also should boost confidence in the Japanese market. In addition, the Bank of Japan is allowing companies to fail, rather than bailing them out of bankruptcy as traditionally has been done, a move that, she said, bodes well for the investment climate.
In general, non-U.S. equities have increased substantially as a percentage of total world market capitalization since 1970, Ms. Baker said, showing a trend of greater confidence in overseas markets and diversification in investment portfolios.
INVESCO has some 40 offices in some 25 countries. For more information, go to www.invesco.com To learn more about World Trade Center programs, call Patrick Tonui at (404) 880-1550.
by Leigh Millerà´€