The document discusses an investment firm's outlook on international equity markets for 2014. It summarizes that central banks around the world will likely continue accommodative monetary policies. It then analyzes data showing signs of stabilization in China's manufacturing and the Eurozone's composite PMI remaining above earlier lows. International equities are deemed to have more attractive valuations than U.S. markets based on price-to-earnings, price-to-book, and dividend yield comparisons. Recovery in global markets has lagged the U.S., with indexes in Europe and China still well below pre-financial crisis highs.

1. biegelwaller.com
Slides of the Month – December 2013
Overview: As we approach the end of 2013, we believe it is appropriate to refocus on the asset classes with the most favorable risk/reward characteristics
going forward. As US markets are trading near all-time highs, we take a closer
look at international equity markets. The next several slides detail our view
that international equities remain an attractive place to invest heading into
the new year.
Experience
Insight
Impact
1

2. Global Monetary and Fiscal Policy
 Central banks around the world appear poised to continue accommodative monetary and
fiscal policies for the foreseeable future:
•
“Based on our regular economic and monetary analyses, we decided to lower
the interest rate on the main refinancing operations of the Euro system by 25 basis
points to 0.25% and the rate on the marginal lending facility by 25 basis points to
0.75%...our monetary policy stance will remain accommodative for as long as necessary.”
– Mario Draghi, President of the European Central Bank, November 7, 2013
•
Japan’s central bank has indicated that it will add to already unprecedented easing if a
setback to the economy warrants it. For now, Governor Haruhiko Kuroda is targeting an
annual 60 trillion to 70 trillion yen expansion in the monetary base, with all 36
economists in a Bloomberg News survey expecting the BOJ to maintain this target at a
meeting this week. – Bloomberg article, October 22, 2013
Experience
Insight
Impact
2

3. International Equity-Data
China Manufacturing data appears to be stabilizing
Experience
Euro-zone Composite PMI remains above earlier lows
Insight
Impact
3

4. Global Valuations
Valuation
Refresher…..
International equities
have substantially more
attractive
price/earnings
ratios, price/book
ratios, and dividend
yields.
Experience
Insight
Impact
4

5. Recovery In Global Markets
International Equity
markets have not
recovered
S&P 500 is up 15%
from 2007 high
Euro Stoxx 50 is
down 33% from
peak
Shanghai is down
63% from peak
Experience
Insight
Impact
5

6. Slides of the Month – Disclaimer
Opinions expressed in this commentary may change as conditions warrant and is for informational
purposes only. Information contained herein is not intended to be personal investment advice for any
specific person for any particular purpose. We utilize information sources that we believe to be reliable
but cannot guarantee the accuracy of those sources. Past performance is no guarantee of future
performance; investing involves risk and may result in loss of capital. Consider seeking advice from a
professional before implementing any investing strategy.
Experience
Insight
Impact
6