Warsaw Stock Exchange finally noticed by investors
These are the moments we, as investors, like very much. To see something before others see it. And to observe madness but not take part in it – just observe how your capital is going up.
Goldman Sachs presented their investing ideas for 2017. Link to the article about it: Here Are Goldman Sachs’ Top Trade Ideas for 2017.
I am particularly interested in point 4 of this prediction. Goldman Sachs’ analysts suggest that among Emerging Markets, Brazil, India and Poland offer the potential for growth. I will make a general overview of those markets. To my comparison, I added also the Russian stock market (I have exposure to it) and two representatives of Developed Markets – United Kingdom and the United States – see the table below.Developed markets – United Kingdom and the United States – are definitely not cheap. I would not consider also Brazil and United Kingdom markets as a bargain. Russia is an obvious good investment idea but you should bear in mind that this market already gained in 2016 +41.21%. My readers know that this year I had my money on this market and I am not thinking about leaving it. Below there is a chart with RTS index for Russian Stock Market.
So, in my opinion, the best market to invest in, among Goldman Sachs’ propositions, is the Polish stock market. There are two other advantages for me to invest in this stock market. First, the Polish currency is now undervalued. USD and EUR are very high in comparison to Polish currency. So if Polish currency will strengthen, the benefits will be even bigger. The second advantage is that I know the companies on this stock market and I regularly beat the market nicely – see the post in which I summarized my 3.5 years of investing on the Warsaw Stock Exchange:
Results of three and a half years of investing on the WSE – my real wallet
The Santa Claus Rally on the WSE
This week, WIG20 (index of the 20 largest companies on the Warsaw Stock Exchange) went up +7.71% so far. Foreign investors see that undervalued Polish currency and good fundamental valuation ratios are the reasons to invest in Poland. WIG20USD (index showing the value of WIG20 in USD) is very low – the potential of growth is then much higher than the potential to fall – see the chart of WIG20USD below.
I hope that not only December will be good for investors but also the rest of the months and that Goldman Sachs’ good prediction about Warsaw Stock Exchange will prove to be true.