Don't Look to Europe for Easy Money; Slow Growth, Threat of Recession Could Make Profits a Long-Term Proposition
With U.S. stock markets in a trading range and still vulnerable to another downturn -- what economists euphemistically call "testing the lows" -- some investors may be looking overseas as a place to put some money.</br></br>But while Europe may be a good place to spend a couple of weeks this summer with the euro still weak against the dollar, sending your money there is something else. You may have to wait three to five years before you can bring it home profitably.</br></br>"We have about 60 percent of our money invested there," said David Herro, who manages the Oakmark International Fund. "We are buying Europe with the cheap euro. But for true investors, not people who think they can get a quick hit, you have to look three to five years out."</br></br>Similarly, Joshua Feinman, chief economist for Deutsche Asset Management, part of Deutsche Bank, said: "I would not encourage people to try timing the market when it comes to Europe. It might be sensible to seek some growth opportunities for diversification outside the United States, if you have a longer time horizon."</br></br>The creation of the European economic union and the single currency was expected to help countries restructure their economies by making their corporate governance more investor-friendly and developing an individual investor culture. Still, the time frame before the European economy catches up to the United States, especially in changing rigid labor practices, remains long, fund managers and international investment strategists say.