It’s Time to Get Money Out of the U.S.

You aren’t going to like what I have to say today. It’s not the kind of message an audience full of American readers wants to hear.

Today’s idea fights a major bias built into every investor. But if you ignore what I share, and succumb to this bias, it could cost you dearly in the years ahead.

You won’t want to hear this. But as you’ll see, it makes sense…

Your money is better off outside the U.S… at least over the next decade.

It’s tough for a lot of folks to get behind this idea. Investing outside the U.S. might seem downright un-American… And it sounds crazy, now that we’ve seen U.S. stocks go up for a solid decade.

But right now, we’re seeing a rare opportunity that could lead to massive gains outside of the U.S.

So in DailyWealth today and tomorrow, I’m covering the details. As I’ll show, two major catalysts are setting up… pointing to major outperformance in a certain area of the world.

And that’s why I believe it’s a smart move to shift some money out of the U.S. and into this space today.

Let me explain…

If you want to make the biggest potential gains in the years to come, you need to look outside of the U.S. You need to look at Europe.

The first reason why it’s time to invest in Europe is extreme hatred

A setup this powerful doesn’t come around often. But when it does, you have to step up to the plate and take advantage of it. Today, in Europe, we have a once-a-decade opportunity to do just that.

Every month, Bank of America Merrill Lynch releases its Global Fund Manager Survey. This report tracks the views of approximately 200 institutional, mutual, and hedge-fund managers around the world.

According to the March survey, these fund managers are hugely bearish on European stocks. As news service Reuters explained…

Fund managers have named bearish bets in European equities as the “most crowded” trade in Bank of America Merrill Lynch’s survey for the first time in its history.

Global investors haven’t just given up on European stocks. They’re betting against European stocks at a record level. Investors have never hated an asset this much in the entire history of this survey.

That’s important because the crowd is often wrong when making extreme bets. Just think about what happened with the U.S. market at the end of last year…

Stocks suffered their worst December since the Great Depression. The benchmark S&P 500 Index fell 9.6% during the month. And stocks lost money on the year as a result. It was the first losing year since 2008.

Investors were giving up in droves. The crowd assumed the bad times would continue… And they began pulling money out of stocks.

According to analysts at data and analytics firm Refinitiv, investors pulled more than $46 billion out of U.S. equity mutual funds and exchange-traded funds in early December… all in just one week. That’s the biggest one-week outflow that Refinitiv has ever recorded.

Of course, we know now that things soon turned around…

The S&P 500 bottomed on December 24. And the best January for U.S. stocks in 30 years followed.

The S&P 500 has rallied roughly 20% from its bottom – with 15% so far this year. We’re nearing new highs once again…

I tell you this because the crowd is betting against European stocks to an even greater extreme right now.

Investors hate Europe today… more than they’ve hated any other market in the history of the fund managers survey. And history says big gains are likely as a result.

Now, this extreme sentiment tells us that a reversal is certain in European stocks. But it doesn’t tell us what kind of returns to expect.

There’s another indicator that does just that, though. I’ll share it with you in tomorrow’s DailyWealth essay… along with a simple way to profit.

Good investing,

Chris Igou

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Source: Daily Wealth