The slowdown of the Chinese economy, which had a negative impact on global markets, may be exacerbated. If this happens, investors will have to return to the shares - says Christian Müller-Glissmenn employee Goldman Sachs Group Inc.
Strategist expressed a neutral opinion on world markets, but he said that the fall will create further opportunities for investment. He prefers European stocks because they are cheaper than in the United States.According to him, the regional companies provide earnings growth.
For the European Stoxx Europe 600 Index last week of trading was the worst in more than four years on Monday, its value dropped. The European Central Bank supports the national economy and is ready to help regional companies that are trading about 8% cheaper than US stocks.
At Goldman Sachs believe that the Stoxx 600 will increase its value by 18% over the next 12 months. About half of the profit expected from the index Standard & Poor's 500 Index.
This year, the bank predicts an 8% increase in profits for the companies included in the index Stoxx 600. Analysts surveyed by Bloomberg, predicted profit growth of just 5.7%. In 2017, the bank predicts 10% growth in corporate profits.
How to settle the instability? Invest in financial and medical companies, as well as those that are more concerned with the recovery of the European economy. Mueller-Glissmen believes that such companies are more protected from the "storms" in the stock market.