Reasons to Invest in European Stocks Now

Mihai-Alexandru Cristea 12/12/2022 | 21:10

On the surface, the economic outlook for the Eurozone and its partners does not inspire confidence. Yet dig a little deeper and as most investors know, a downturn can be the best time to start investing while stocks and shares are low. That means rather than avoid the market, now could be a great time to begin. Below, we discuss why you must consider investing in Europe.


The EU Is Recovering

The EU has a robust path for recovery. A €750-billion fund is still being dispersed to aid it. This money is going to see green energy and digital innovation at the forefront alongside a huge telecommunications push. While this will assist all countries, the impact may be more obvious in nations that have been harder hit. Italy, for example, has suffered from high inflation and economic stagnation but may recuperate and show more gains than somewhere like Germany.

All this potential growth comes with the top benefits that Europe brings, which can be overlooked. The EU has a huge domestic output of $16.6 trillion a year. They have a large import and export market, along with a buoyant internal services market. In places like Hungary and Poland, access can also be given to cheap labour opportunities. Thus, the zone does have the tools it needs to spur growth. All this means that it could be a great place to make short-term investment gains.

Stocks Are Undervalued

A lot of European stocks are currently undervalued. The question of access to natural gas hangs over many of them, and they are below their long-term average. Investors hoping to capitalise on market volatility may see now as the time to begin. Anyone new to trading might also see this as an interesting time to get involved. The review shows how many trading platforms focus on education to help newcomers find their feet in the markets. Knowledge of how CFDs, for example, work could come in very handy in Europe in the near future.

The inevitability that Europe is going to wean itself off gas reserves could itself spark a wave of manufacturing and technological pushes. The EU already aims to triple the use of solar and wind power by 2030. Essential to this process is copper, which is likely to rise in price and production as a result. For those who employ a high level of risk in their portfolio, CFD trading on copper could provide high potential gains.

It Has World Leading Companies

Despite not having a definitive tech hub in the style of Silicon Valley, Europe has several companies forging ahead with innovation. New businesses such as GetYourGuide and Funding Circle are finding new ways to provide services. All these start-ups are working alongside huge established European brands. Luxury goods such as Ferrari and many of the great fashion houses have bases in Europe.

However, a lot of global firms, particularly from the US, use Europe as a base to access the rest of the world. Coca-Cola, Phillip Morris and GE have huge exposure here and need Europe to function. Many companies are set up there to access the Middle East and North Africa. With Europe remaining a place where businesses are constantly moving in and out, the potential is obvious for all to see.

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Mihai-Alexandru Cristea | 21/12/2023 | 14:13
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