Wells Fargo Investment Institute global strategists Paul Christopher and Sean Lynch discuss Europe's progressing economic recovery despite a series of intertwining issues.
All investing involves risks including the possible loss of principal. Equity securities are subject to market risk which means their value may fluctuate in response to general economic and market conditions and the perception of individual issuers. Investments in equity securities are generally more volatile than other types of securities.
Investing in foreign securities presents certain risks not associated with domestic investments, such as currency fluctuation, political and economic instability, and different accounting standards. This may result in greater share price volatility. These risks are heightened in emerging markets.
Investing in fixed income securities is subject to interest rate, issuer, credit, inflation and liquidity risks. Bond prices fluctuate inversely to changes in interest rates. Therefore, a general rise in interest rates can result in the decline in the bond's price. In addition to the risks associated with investing in international and emerging markets, sovereign debt involves the risk that the issuing entity may not be able or willing to repay principal and/or interest when due in accordance with the terms of the debt agreement.
An index is unmanaged and not available for direct investment.
MSCI Germany: The MSCI Germany Index is designed to measure the performance of the large and mid-cap segments of the German market. With 57constituents, the index covers about 85% of the equity universe in Germany.
MSCI Sweden: The MSCI Sweden Index is designed to measure the performance of the large and mid-cap segments of the Swedish market. With 30 constituents, the index covers about 85% of the equity universe in Sweden.
MSCI Europe: The MSCI Europe Index is a free float-adjusted market capitalization weighted index that is designed to measure the equity market performance of the developed markets in Europe.
MSCI France: The MSCI France Index is designed to measure the performance of the large and mid-cap segments of the French market. With 74 constituents, the index covers about 85% of the equity universe in France.
MSCI Italy: The MSCI Italy Index is designed to measure the performance of the large and mid-cap segments of the Italian market. With 24 constituents, the index covers about 85% of the equity universe in Italy.
10-year German Bunds: Yield on government bonds issued by the Federal Republic of Germany located in central Europe.
U.S. 10-year yield: Yield on 10-year government bonds issued by the United States Department of the Treasury.
S&P 500 Index is a market capitalization-weighted index composed of 500 widely held common stocks that is generally considered representative of the U.S. stock market. The Index is unmanaged and not available for direct investment.
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The information in this report was prepared by the Global Investment Strategy (GIS) division of WFII. Opinions represent GIS’ opinion as of the date of this report and are for general informational purposes only and are not intended to predict or guarantee the future performance of any individual security, market sector, or the markets generally. GIS does not undertake to advise you of any change in its opinions or the information contained in this report. Wells Fargo & Company affiliates may issue reports or have opinions that are inconsistent with, and reach different conclusions from, this report.
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