When deciding to invest in a foreign stock market, valuing its attractiveness is one of the first steps you should take. Depending on which country you are looking at, the information available in English may be scarce; but thankfully, there are several tools that almost anyone can use to examine global markets.
While P/E ratios change by the day, will not tell you the specifics of single stocks, and can sometimes be misleading, they may give you a good idea of where to start your research.
The picture above shows that Asian markets, along with some of the weaker European economies such as Greece and Russia, have low P/E ratios and may be worth a closer look. However, some countries are still above their historic average P/E despite being lower than much of the world’s. Investors may want to be wary of possible value traps in places like Thailand and Indonesia.
Looking at some economic data of the country you want to invest in can also help you to determine its overall prospects. GDP growth, trade numbers, debt-to-GDP ratios, and credit ratings by agencies such as Fitch and Moody’s can be found easily by going to sites like Wikipedia. Both current data and long-term trends are important.
Once you are looking for individual stocks, things get difficult. The website of an index itself often has the best details about the stocks listed on it, but may be hard to navigate as a foreigner. Bloomberg has some of the largest amount of information on global markets, but is still not comprehensive.
When in doubt, it may be best to consult a professional. While there is a huge amount of opportunity in the world, you should only invest in things that you are able to understand.