• In terms of fundamentals, the German stock index is overvalued compared to the S&P 500.
• However, there are a few stocks that could offer interesting diversification possibilities as revenues aren’t that dependent on Europe.
• Some companies also give inflationary protection which is one of the greatest European risks for investors in the long term.

Introduction

I’ve described the investment environment in Europe as very risky due to the many black swans that could hit it, from political to financial issues. Nevertheless, this doesn’t mean that there aren’t any good investments in Europe, especially for those who want to take advantage of the liquidity provided by the ECB and from the possibility that the ECB follows the Bank of Japan, i.e. starts buying stocks when it becomes clear that buying corporate bonds isn’t enough to keep the economy growing and to spur inflation. More →