Fundamental Valuation Ratios – why I invest in Russia and Poland and I am not so keen on investing in UK shares

In the table below you can see fundamental ratios for International Equity Markets:table1

What we see from this table – the Russian market is the cheapest one in the world – of course there is a political risk involved and it is better to be aware of this.

For me the most important indicator is CAPE – it is a Cyclically Adjusted Price to Earnings Ratio. The cheapest markets according to this ratio are: Russia, Brazil, Czech and Poland.

Price Book Ratio below 1 means that you can buy not indebted assets of companies below their market value – see Russia, Poland and China.

Relative Strength shows which markets are now noticed by investors. As we see, the developing markets are now wanted: Russia, Brazil, Poland, Hungary and Turkey.

I do not like a Dividend Yield ratio which is given here. The reason is that on the developed markets like in the United Kingdom – many companies are still paying more and more dividend only because there is a group of investors who are buying stocks which are not necessarily undervaluated but only because of high dividend yield. I have read that there are companies which pay more in dividends than the company can generate net profit. It is not what I expect from a company. I prefer that the management decides to share profit with investors but also make this profit work for future growth of the company. You can see that even though PE ratio for United Kingdom is 35.4, the average dividend is as high as 4.00%.

The conclusion is that I will still invest mainly in Poland and buy funds for Russian market. China market is still in my mind.

I also believe that I can find very good stocks on the UK market but I will wait till the referendum concerning  leaving EU.


4 thoughts on “Fundamental Valuation Ratios – why I invest in Russia and Poland and I am not so keen on investing in UK shares

  1. Pingback: +21.38% in 4 months – results of my investment wallet in £ – stockandfreedom

  2. Pingback: Fundamental Valuation Ratios – still focus on Russia, Poland and China stock markets – stockandfreedom

  3. Pingback: +48.50% in half a year – a summary of my investment wallet in £ on my ISA account – stockandfreedom

  4. Pingback: +79.30% – great results of the 1st year of my mutual funds wallet – stockandfreedom

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