Equity opportunities skewed by euro worry

Many investors are worried about the outlook for European equity markets into 2008 given the continuous strength of the euro. However, there are clear structural trends that make these markets relatively attractive - in particular, an increased focus on shareholder value and exposure to emerging markets. Investors are right to be worried about European equity markets when the euro keeps strengthening, as approximately every 10% upward move takes around 3% off European profits. While valid, this analysis is static and therefore does not incorporate companies' ability to react. Focus on s...