Global Stocks Look Cheap But Risky

Europe controls the fate of international markets in 2012.

Uncertainty ruled world markets in 2011, but one thing was sure: A big bear clawed foreign stocks. Through November 4, the MSCI EAFE index, which tracks stocks in developed nations, tumbled 9%; the MSCI Emerging Markets index fell 12%. Over the same period, Standard & Poor's 500-stock index was flat.

Expect volatility through the early part of 2012, says Virginie Maisonneuve, co-manager of Vanguard International Growth Fund, in part because of unresolved issues from 2011. Details on how to solve Europe’s government-debt crisis still need to be ironed out. Economic growth in China, the world’s growth driver, is slowing, even as inflation worries weigh on markets from Asia to Latin America.

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Nellie S. Huang
Senior Associate Editor, Kiplinger's Personal Finance

Nellie joined Kiplinger in August 2011 after a seven-year stint in Hong Kong. There, she worked for the Wall Street Journal Asia, where as lifestyle editor, she launched and edited Scene Asia, an online guide to food, wine, entertainment and the arts in Asia. Prior to that, she was an editor at Weekend Journal, the Friday lifestyle section of the Wall Street Journal Asia. Kiplinger isn't Nellie's first foray into personal finance: She has also worked at SmartMoney (rising from fact-checker to senior writer), and she was a senior editor at Money.