Rethinking Investment in Europe

Investment in Europe has recently shown potential for growth, particularly as European markets have been outperforming the U.S. The current price-to-earnings ratios in Europe are significantly lower than those in the U.S., suggesting that European equities may present value opportunities. Historical data indicates that the U.S. was trading at a peak premium relative to the rest of the world, while Europe was at a historic discount. This shift in valuation offers a compelling narrative as expectations for U.S. companies have reached unsustainable highs compared to the low expectations for European markets, allowing for a possible upside in European equities.