A.T. Financial Newsletter
Global economic engines
may help drive your portfolio
largest companies, but that optimism and genuine reform are trickling down throughout the economy.

Confidence indicators
How else do people signal their confidence in an economy? Well, in part, by visiting the region. Here again, we see evidence of real improvements.

International tourism is up across both Europe and Japan. In the first nine months of 2013, Europe saw a 6% jump overall, with a big spike in the UK, where visitorship was up 18%. Even beleaguered Greece welcomed 15% more foreign visitors. Japan notched up an impressive 23% increase.3 That's a lot of people infusing these economies with cash and economic stimulation.

Even if your plans don't include a vacation in Europe or Japan this year, you can still participate in these economies by investing in them. Yes, there are risks, which is why it's best to invest only as part of a diversified portfolio. For most investors, professionally run, actively managed mutual funds provide an appropriate way to access the potential growth of international markets.

If you'd like to learn more about opportunities in Europe, Japan, or any international market, please speak with us. We can help you review the opportunities and select specific funds based on your objectives, time horizon, and current holdings.
1 To Dec. 20, 2013. Source: Morningstar.
2 The Yomiuri Shimbun,
The Japan News, Dec.16, 2013.
3 UNWO Tourism Highlights,
2013 Edition.
For six long years, investors have worried that the crisis in Europe was virtually unfixable. Fears that the Euro itself would be dissolved only added to the malaise. But dramatic improvements in Japan and across much of Europe have combined to make many investors feel more optimistic than ever.

Is it even possible that Europe and Japan, two of the most downtrodden economies of the recent past, are now ripe with potential? Let's take a look at some of the signs and key indicators that may provide some insight into the potential of these regions.

Economic indicators
The European Union is stabilizing, the economy is growing, and securities in the Eurozone may be underpriced relative to the U.S. and other developed markets. Even the so-called PIIGS of Europe (Portugal, Italy, Ireland, Greece, and Spain) are showing signs of, if not actually gaining traction, at least no longer holding back the rest of the continent.
In fact, as a group, European equity funds have returned an average 23.1% for 2013,1 their best showing since 2006.

Meanwhile, in Japan, the new prime minister has had more success kick-starting the economy over the last 12 months than the nation has seen over the past 20 years. Exports are up, consumer spending is up, and infrastructure spending is way up and will continue to grow as the clock ticks toward the 2020 Olympics in Tokyo. The list of improvements is so long and dramatic, the global press has dubbed Prime Minister Abe's policies "Abenomics."

As 2013 drew to a close, the Bank of Japan's closely watched Tankan survey added even more fuel to the economic fire when it revealed that business sentiment among both small and mid-sized companies was positive for the first time in 22 years.2

This suggests that Abenomics is not just taking hold among the
Boost diversification
In addition to growth potential, adding international funds to your portfolio can enhance your portfolio's diversification. As you can see from the charts below, Canada's markets are dominated by the
financials and energy sectors, while Europe has significant exposure to healthcare and industrials
and Japan to information technology.
Source: MSCI Canada Index (gross returns, Canadian dollar), MSCI Europe Index (gross returns, euro), and MSCI Japan Index
(gross returns, Japanese yen), November 2013
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