I would recommend staying with the Global Index.Hi fellow Europeans.
Does it make sense to tilt the investment more to the Europe index, or is that thought a result of panic and short term performance chasing? At the moment I'm in a World developed index fund, which is 70% US. I'm thinking of mix in a Europe index fund.
Indeed I believe that is what the Norwegian State Fund (the oil fund) does as well - with some tilting against fossil fuel producers.
The values in the market are set by millions of trades going on every second, by the most informed investors in the world. With far better access to information, in real time, than you and I have. No one knows how the recent political situation in the USA and world will go.
The argument for Europe, and I overweighted Japan for the same reason, was that it was "cheap" on a Price to Earnings ratio basis, relative to the USA. Indeed, this year, the European markets have done well. But then adding to the European weighting risks performance chasing. If the current new wave of European unity falls apart (the French presidential elections lie ahead) then this might dissipate rather quickly. Longer term, if you read the headlines of Mario Draghi's report on economic growth, Europe has failed to develop the ecosystem that nurtures the next Meta or Google. Other than ASM Lithography, Europe is lacking in multi billion dollar tech cos.
But that's all irrelevant philosophising. In the end, I think it's best just to track the global market index, because that's the average of everyone's best guess.
Statistics: Posted by Valuethinker — Wed Mar 12, 2025 3:59 am