“Because of the European debt crisis and the slowdown in China’s economy, foreign stocks are trading at a discount to U.S. stocks, according to Money Magazine, and now might be a good time to invest overseas.
Foreign stocks have traded at a slight premium to U.S. stocks historically, as measured by a conservative gauge of price-to-earnings (P/E) ratios, but they are now trading at a 34 percent discount.
This discount is far cheaper than the discounts were during the Asian currency crisis of 1997 and the Latin American debt crisis in the 1980s. Interestingly, in the decades after those crises, stocks in those regions hammered U.S. stocks.”
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