Weekly Notes With Tiho — Issue 17Location: Belgrade, SerbiaWhat do Poland, Turkey, and Austria have in common?Firstly, depending on your high school teacher, all three countries are part of the greater European continent.Furthermore, all three countries experienced turbulent financial and/or political conditions over the last few years.Finally, all three are the best performing stock market indices year to date.And chances are, you probably didn’t own them in 2017.Poland is up a staggering 51% year to date.Turkey and Austria are a close second with 2017 returns of 45% and 42%, respectively.Before we discuss Poland, Turkey, and Austria in further detail, let us observe the year to date performance of global indices in the table below.Year To Date ReturnsWhat a terrific year 2017 has
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Weekly Notes With Tiho — Issue 17
Location: Belgrade, Serbia
What do Poland, Turkey, and Austria have in common?
Firstly, depending on your high school teacher, all three countries are part of the greater European continent.
Furthermore, all three countries experienced turbulent financial and/or political conditions over the last few years.
Finally, all three are the best performing stock market indices year to date.
And chances are, you probably didn’t own them in 2017.
Poland is up a staggering 51% year to date.
Turkey and Austria are a close second with 2017 returns of 45% and 42%, respectively.
Before we discuss Poland, Turkey, and Austria in further detail, let us observe the year to date performance of global indices in the table below.
Year To Date Returns
What a terrific year 2017 has been.
Let’s face it, if your portfolio is not up in double digits, you probably didn’t send your capital towards foreign investments this year.
Out of the 50 country stock markets I track, all of which are priced in US Dollars and adjusted for dividends (total return), 28 have achieved gains of 20% or more in just eight and half months.
What I find even more interesting is out of the 28 out-performers, fifty percent of them come from the European continent.
And who are the underperformers?
A decent part of the Middle East, with stock markets like Qatar, Egypt, United Emirates and Saudi Arabia.
Moreover, United States — especially sectors like Small Caps and Real Estate — are also on the list.
While the year is not over yet, so far Poland is going for gold, Turkey for silver, and Austria for bronze.
Investing With Hindsight
It isn’t very difficult to be a Monday morning quarter back.
Discussing matters of life, especially financial investments, tends to be an effortless and trouble-free experience when viewed in hindsight.
Did you end up allocating a portion of your portfolio to Poland in December 2017?
I don’t blame you if you didn’t… and I shake your hand if you did.
After all, the Polish stock market (seen in the chart above) was down over 60% from its all time high.
Furthermore, that record high was a decade ago, back in 2007.
Let’s think about that.
A whole decade of doing nothing but losing money.
As the chart above shows, there was a similar “ugliness” with Turkish and Austrian stocks, too.
Not to mention the fact that all three countries were regularly making headlines for all the wrong reasons — Turkey in particular.
Crisis Creates Opportunity
Clearly, crisis investing is extremely difficult because it forces you to be a contrarian when all others are telling you how awful the current conditions are.
You need someone with many years of experience to make the right portfolio tilts and to tactically overweight/underweight asset classes for the coming 6 to 12 months.
At the start of 2017, it was Poland, Turkey, and Austria.
These three equity markets might even run a bit more into the end of 2017, posting truly remarkable returns for those who had the nerve to buy them cheap.
And what about 2018?
Which countries or asset classes will be the outperformers?
If you would like to know how I am positioning my client’s portfolios, which countries I am buying and where I see valuation opportunities — let us make arrangements for a free one-on-one investment consultation.
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