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Monday, February 6, 2017
European stocks have boomed to start 2017.
Last week, I told you that European stocks were entering a stealth bull market. And right now, we're seeing a huge breakout in Europe's largest economy... Germany.
In December, the iShares MSCI Germany Fund (EWG) jumped 6% in just three days. And the rally has led to new 52-week highs.
History shows buying after a 52-week high is a good idea. Not only that, but it could lead to double the typical one-year return on German stocks... starting now.
Let me explain...
I know most investors are scared of buying after a market hits new highs.
It feels wrong. It feels like you already missed it. But history tells a different story...
Buying after a new 52-week high is almost always a good idea. And in the case of German stocks, it leads to dramatically higher returns going forward.
German stocks tend to more than double their typical one-year return after hitting a new 52-week high. And that is exactly what is happening right now. Take a look...
German stocks just staged a major breakout. This almost never happens...
German stocks have hit new 52-week highs only 5% of the time going back to 1996. But what happened next is especially interesting...
Since 1996, buying after these new 52-week highs was a great idea. It led to more than double the typical "buy and hold" return for German stocks over the following year. Take a look...
German stocks saw lackluster performance over the last two decades. On average, the typical buy-and-hold strategy led to 3.1% annual gains over that time (not including dividends).
That's not an impressive return... But buying after German stocks hit a new 52-week high led to significantly better gains... a 5.2% return in three months, 6.8% in six months, and 6.9% over the next year.
That's incredible outperformance... It's not often you get a chance to double the typical annual return in an entire country.
That is exactly the opportunity we have in German stocks right now. They just broke out to a new 52-week high... And history says more gains are likely from here.
I expect Europe as a whole to be a major investing story for 2017. And German stocks look like a great place to put money to work right now.
"We're in uncharted territory today," Steve writes. "A 'stealth' bull market is now underway in Europe – and your potential upside is far greater than you can imagine." European stocks have never seen an extreme like this... Get the full story right here.
"Stocks perform fantastically after hitting new 12-month highs," Steve writes. "Most people don't want to believe these results... " Most people believe a new high is a time to sell, not an opportunity to buy. But the numbers tell a different story. Learn more here.
NEW HIGHS OF NOTE LAST WEEK
Facebook (FB)... social media
Apple (AAPL)... consumer electronics
Cirrus Logic (CRUS)... semiconductors
Micron Technology (MU)... semiconductors
Symantec (SYMC)... security software
Yelp (YELP)... online reviews
Vantiv (VNTV)... mobile payments
LendingTree (TREE)... online peer-to-peer lending
Royal Bank of Canada (RY)... Canadian bank
Sprint (S)... telecom
Time Warner (TWX)... media
Twenty-First Century Fox (FOXA)... entertainment
Walt Disney (DIS)... entertainment
Sirius XM (SIRI)... satellite radio
Domino's Pizza (DPZ)... pizza
Vail Resorts (MTN)... ski resorts
Ferrari (RACE)... luxury cars
Danaher (DHR)... industrial goods
Snap-on (SNA)... tools
Stanley Black & Decker (SWK)... tools
Energizer (ENR)... batteries
Mettler-Toledo (MTD)... scales
Boston Scientific (BSX)... medical equipment
Allstate (ALL)... insurance
Cigna (CI)... health insurance
NEW LOWS OF NOTE LAST WEEK
GGP (GGP)... malls
JC Penney (JCP)... department stores
Ralph Lauren (RL)... clothing
Carter's (CRI)... kids clothing
Mattel (MAT)... toys
Fitbit (FIT)... fitness trackers
Under Armour (UAA)... expensive athletic apparel
VF Corporation (VFC)... JanSport, The North Face, Lee jeans
L Brands (LB)... Victoria's Secret, Bath & Body Works
Tempur Sealy International (TPX)... mattresses
Rite Aid (RAD)... drugstores