With the major stock indexes back near their all-time highs, many investors are no doubt wondering whether it’s time to tilt their stock weightings away from U.S. large-caps.
 
Such investors might want to take a look at two articles I came across — one on European stocks and another on U.S. gold miners.
 
Writing on his blog, money manager Charles Sizemore points out that European stocks remain cheaper than U.S. names, particularly in places like Spain.
 
But Sizemore takes a reasonable and diversified approach to considering European equities. For example, he’s wary of Greece, whose economic future is far from certain even if the country’s leaders have shown a willingness to accept a new bailout and undergo some degree of austerity to stay in the European monetary union.
 
”I’m not quite willing to jump into the Greek market just yet, as there aren’t many liquid stocks to choose from, and those that are available aren’t quite as cheap as I’d like to see, given the macro risk,” he writes.
 
But Sizemore is bullish on the Continent as a whole, and he suggests the Vanguard FTSE Europe exchange-traded fund as a diversified way to play it.
 
“VGK gives you exactly what you want from a Vanguard index fund: instant diversification, tax efficiency and rock-bottom fees,” he writes.
 
For more aggressive investors, he recommends iShares MSCI Spain ETF. “While Greece’s economy remained depressed, the Spanish economy is expected to grow 2.8% this year,” he writes, adding that ongoing regional unrest in Catalonia never seems to escalate in massive troubles that could undermine the economy.
 
He points out that based on estimates by Research Affiliates, Spanish stocks trade at a cyclically adjusted price/earnings ratio (CAPE) of just 12, which is less than half the CAPE valuation currently being sported by American stocks.
 
Interestingly, many leading Spanish stocks also have relatively little exposure to the Spanish economy. “Spanish multinationals are active across Europe, and taking advantage of common language and cultural ties, they also have an outsized presence in Latin America,” Sizemore writes. “EWP gives a nice basket of Spanish stocks, including household names like Banco Santander, Telefonica and Zara’s parent company Inditex ( IDEXY ).”
 
Indeed, it’s the global nature of many leading Spanish stocks that make them a safer bet than many realize.
While many investors are no doubt disgusted by the performance of gold-mining stocks, the pessimism surrounding this sector may present opportunities. Over the past year, for example, the Market Vectors Gold Miners ETF has fallen 40%, whiles the SPDR Gold Trust, a proxy for the metal instead, is only down 13%.
 
But a piece by Bloomberg points out that gold-mining stocks are now “the cheapest relative to the metal itself since at least the 1980s.”
 
“Is that a sign that gold stocks are oversold,” asks Bloomberg writer Isaac Arnsdorf. Some analysts expect the metal’ss price to regain some ground in the next six months. Morgan Stanley in July upgraded Goldcorp ( GG ), the index’s biggest member by weighting, citing an attractive valuation.
 
But Arnsdorf points out that there may be a good reason why gold miners are destined to remain cheaply valued compared with bullion. According to Bloomberg Intelligence, investors are increasingly using proxies such as over-the-counter swaps and exchange-traded funds to play gold instead of mining companies.
 
If investing habits are changing in regards to playing gold, that’s worth noting.
 
I’ll close with a story in the National Interest that grabbed my attention because of its arresting headline: “A Scary Thought: Could America Become the Next Greece?”
 
It’s easy to dismiss the premise of such an article right off the bat. After all, the U.S. couldn’t be more different than Greece. We mostly pay our taxes here, and our workers can only dream of retiring in their 50s with a pension in place. We also have a more diversified economy and we print our own money, which gives us the ability to devalue it to help our economy.
 
Besides, the article is appearing in a highly political publication: National Interest was founded by the late Irving Kristol, often called the godfather of neo-conservatism.
 
But the piece, written by Romina Boccia, a fellow at the Heritage Foundation, does make a case for why Americans have some reasons to worry about our economic soundness.
 
The article states that the “fiscal pressures confronting the United States spring from sources similar to those afflicting Greece. Growing spending on public benefits threatens to overwhelm the U.S. economy in the long term. At the federal level, Social Security, Medicare, Medicaid and other health programs consume more than half of the budget, and spending on these programs is growing steeply.
 
After accounting for other benefits, transfer payments make up about 70 percent of all spending in the United States today.”