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S&P Capital IQ Global Equity Strategist Alec Young on where to invest overseas to boost portfolio growth.
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I happen to think that the US market is due for some kind of correction but you still wanna investor money somewhere our next guest says.
He knows where there are solid bets in the valuations are cheap in fact.
He says -- four countries that consistently outperformed the S&P in the fourth quarter.
Joining us now is Alec young global equity strategist for S&P capital IQ.
-- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- Of course a lot of what's happening in in Europe rests on the shoulders of Germany why do you think they'll do well in the fourth quarter.
Well they've been doing well all year they've been outperforming on you know the rest of the eurozone all year and historically -- went back to that.
To 1970.
And we noted debt Germany.
His average down 2% returns on average in the fourth quarter months October November December and that's -- about one point three for the on the broad developed.
International asset class so it's been a very strong seasonal performer.
In the fourth quarter you know over the last 41 years and and beyond that because we don't think people -- -- base investment decisions strictly on seasonal trends but looking at the fundamentals in Germany.
We definitely think they're a lot healthier than the rest of the continent by the way fundamentals are good but I just saw -- -- most Germans now want out of the Euro do you think those.
Political considerations.
-- for some action.
Well I don't think he can blame them given everything that's been going on over there there are some political hurdles in Europe but they're more in the weaker countries like Spain and Greece we think they're ultimately gonna be manageable.
But we wouldn't let the fact that the average German is tired of bailing out its neighbors or you know keep you out of of German stocks you think that's a perfectly normal reaction from the man in the street to have.
Given what's been going on over the last few years right number two the country that does well in the fourth quarters probably most stable country of all time financially -- -- Switzerland.
Yes Switzerland -- you know as you would expect it's got a lot more exposure defensive areas like health care consumer Staples those stocks have held up very well.
In overseas markets -- you're given all the fear in the volatility.
On and if we look back seasonally.
On Switzerland's averaged a one point 9% return in in US dollar terms in the fourth quarter months so again.
-- that's much better than the broader one point 3% that we've seen in broader developed international asset class so Switzerland again.
A strong fourth quarter performer historically and we like -- right now because it it's definitely got some safe haven qualities that make it appealing in 2012 okay now that next time you're not recommending them specifically but you can speak to them.
One is Turkey.
Interesting -- Turkey for the longest time was trying to become a part of the EU I'm not -- right now they're glad date.
They did they were never accepted as a part of the -- they've been doing very well on their own.
They have and one of the reasons they've been doing well as they've been diversifying their exports away from Europe rates down to about a third but haven't just under 50% last year and even treating more with the Middle East.
I'm so now the fact that they're able to kind of differentiate themselves a little bit from Europe is actually helping them I'm on the emerging market countries we only have data going back to 1992 so it doesn't go back -- -- -- -- it does in the developed area.
But Turkey's been by far the best performing fourth quarter player.
It's averaged a four point 7%.
While monthly gain in the fourth quarter net you know keep in mind that's based on.
Twenty years with the data not forty so you gotta take it with a bit more of a grain of salt we think -- Again when you a couple of with the fact that we'd like the fundamentals in Turkey where growth is accelerating from about 3% this year to 4% next year inflation's under control the trade deficits falling.
They're -- diversifying away from from Europe content portals that's out Alec I gotta push you along here because that they're talking about grain of salt I always take Russia with a big grain of salt and frankly the corruption problems the government getting involved -- business.
Always turn me off to Russia but you say they do well the fourth quarter final.
They have as well going back twenty years some Russia's averaged a three and a half percent monthly gain.
In the October November December time -- so that's -- is about a one point 9% average gain for the broader emerging markets space so.
On a seasonal basis -- Russia has been very strong although again people shouldn't shouldn't just look at seasonal when making these decisions Alec young great advice Alec thank you very much from as -- -- capital IQ good to see again appreciate.
