May 17, 2010

Europe Outperforms Eurozone, Greece Weakest in Dow Jones Index

Numbers put to so-called PIGS countries' performance

We know it's bad, but just how bad is it? With news of civil unrest daily in Greece and the possible spread of the "contagion" throughout Europe, Dow Jones released recently updated numbers on the plight of the euro zone.

As of Friday, May 14, 2010, Greece is the worst performer of the so called "PIGS countries" Portugal, Italy, Greece and Spain (Ireland is at times also added to the acronym). Year-to-date through May 14, Portugal is down 24.62%, Italy 25.25%, Greece 37.35% and Spain 31.61%.

In the same time frame, Europe, measured by the Dow Jones Europe Total Stock Market Index, is down 12.56%, outperforming the Eurozone, which is down 18.13% as measured by the Dow Jones Eurozone TSM Index. The Euro was down 12.83% year-to-date as of May 14.

David Krein, senior director of product development and analytics for Dow Jones Indexes, has compared the risk factors of the six European total stock market indexes:

"Historically, Greece has been riskier than any of the other 'PIGS' nations based on annualized standard deviation over both short and long timeframes. Greece has experienced significantly greater risk than Europe as a whole in the past year. In that same timeframe, Ireland has maintained a risk level similar to Europe, while Portugal, Italy, and Spain have similar levels of risk to each other that falls roughly in-between."

The year-to-date performance of the six indexes mentioned above is a departure of the positive results achieved in 2009. Between December 31, 2008 and December 31, 2009, the Dow Jones Portugal TSM was up 41.87% outperforming Italy (28.10%), Greece (26.98%), Spain (40.78%), Europe (41.08%), and the Eurozone (34.81%) respectively. The Euro was up 2.71% in the same time frame in 2009.

The performance is based on the Dow Jones Portugal, Dow Jones Italy, Dow Jones Greece, Dow Jones Spain, Dow Jones Europe, and Dow Jones Eurozone Total Stock Market Indexes.

John Sullivan is editor-in-chief of Boomer Market Advisor and AdvisorBiz.com, part of Summit Business Media's Advisor Media Group.

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