European stocks have boomed to start 2017.

Last week, I told you that European stocks were entering a stealth bull market. And right now, we’re seeing a huge breakout in Europe’s largest economy… Germany.

In December, the iShares MSCI Germany Fund (EWG) jumped 6% in just three days. And the rally has led to new 52-week highs.

[ad#Google Adsense 336×280-IA]History shows buying after a 52-week high is a good idea.

Not only that, but it could lead to double the typical one-year return on German stocks… starting now.

Let me explain…

I know most investors are scared of buying after a market hits new highs.

It feels wrong. It feels like you already missed it.

But history tells a different story…

Buying after a new 52-week high is almost always a good idea. And in the case of German stocks, it leads to dramatically higher returns going forward.

German stocks tend to more than double their typical one-year return after hitting a new 52-week high. And that is exactly what is happening right now. Take a look…

German stocks just staged a major breakout. This almost never happens…

German stocks have hit new 52-week highs only 5% of the time going back to 1996. But what happened next is especially interesting…

Since 1996, buying after these new 52-week highs was a great idea. It led to more than double the typical “buy and hold” return for German stocks over the following year. Take a look…

CaptureGerman stocks saw lackluster performance over the last two decades. On average, the typical buy-and-hold strategy led to 3.1% annual gains over that time (not including dividends).

That’s not an impressive return… But buying after German stocks hit a new 52-week high led to significantly better gains… a 5.2% return in three months, 6.8% in six months, and 6.9% over the next year.

That’s incredible outperformance… It’s not often you get a chance to double the typical annual return in an entire country.

That is exactly the opportunity we have in German stocks right now. They just broke out to a new 52-week high… And history says more gains are likely from here.

I expect Europe as a whole to be a major investing story for 2017. And German stocks look like a great place to put money to work right now.

Good investing,

Steve

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Source: Daily Wealth