What Does The Greek Debt Crisis Mean For European And American Investments?

The situation in Greece may be acting as a hindrance for investors wanting to invest in European equities. However, according to Hirtle Callaghan & Co. CEO and founder Jonathan Hirtle, it has actually made European stocks far more attractive than their American counterparts.

Hirtle was on Bloomberg TV Tuesday to discuss the current valuation of the U.S. equity markets overall and why it makes sense for investors to own European stocks right now.

U.S. Markets Aren't Cheap Anymore

"We are really focused on a world that's a low return environment," Hirtle said. "So, when we are talking to clients around the world, we have to understand that you are going to achieve a certain return over time, but you want to modulate how aggressive you are based on the environment.

"So, we have a low return environment. We still have a 10-year that is trading at about 2.25 and everything trades off of that. So, the United States markets, while not grossly expensive, are not cheap anymore."

He continued, "The index funds, for example, a simple S&P 500 index fund, we think, are a bad idea, because they are not selective about what you own. And there's a tremendous dispersion within the market today, and this is maybe a time when it makes sense to pay for active management and be careful about selecting among your choices within the market."

Related Link: Greece To Plead Its Case At A Last-Chance Summit

Gaining Attraction: Europe

Hirtle was asked if European stocks are getting cheaper due to what's happening in Greece and if that makes them attractive. He replied, "They were cheaper, and they are getting even cheaper. I mean, we really don't think that what's going on in Greece is going to have any impact on BMW's ability to earn money, and we are worried about their earnings going forward.

" BMW is trading at €90, a few months ago it went to €120. It's back down to &euor;98. So, all those spectacular global multinational companies that happen to be headquartered in Europe [...] are getting more attractive every day."