Why small and mid caps could help solve Europe woes

ON EUROPE

While the short-term outlook is of course extremely uncertain, there are good reasons to suggest that the long term prognosis is much better.

The equity culture throughout Europe is improving and, with region-wide austerity measures and public sector restructuring, the economies should be getting more flexible and responsive to economic conditions. These can be powerful drivers for long-term equity market performance. The equity culture in Europe has been improving over the last decade and will continue to evolve. This is one of the main reasons why Europe has a good chance of avoiding the Japanese style ‘lost decade’ that many investors fear, and the contrast here is stark.  Investors have tried to draw parallels between Euro...