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Investing World Cup: South America vs. Western Europe

It seems fitting that in a World Cup-centric series of Motley Fool duels, South America and Western Europe would face off. My knowledge of soccer could be written on the back of a gum wrapper, but I know that South American countries like Brazil and Argentina are highly competitive, as are European squads like the French and Italians.

Let's set the scene: Western Europe is almost unquestionably the easiest place for U.S. investors to invest abroad. There are ample liquid stocks to choose from, the economies are stable if not scintillating, and there's a long tradition of due process and more-or-less fair dealing with investors, apart from government interference in mergers and acquisitions. On the flipside, growth is somewhat scarce, and many governments are groaning under the weight of generous social-welfare packages.

On the other hand, South America is the more dynamic grower, but at the cost of sometimes-shaky governments, resource-based economies, and a history replete with words that scare the bejeezus out of investors: "hyperinflation," "coup," and "expropriation," among others.

And while I can find any type of company in Western Europe -- a Microsoft-type (Nasdaq: MSFT  ) software company like SAP, a Wal-Mart-like (NYSE: WMT  ) retailer like Carrefour, or a General Electric-like (NYSE: GE  ) conglomerate in Siemens -- that's not the case in South America. There are good stocks south of the equator, but you have to look harder to find them.

Primary stock indexes:

Western Europe:

  • FTSE 100 (United Kingdom)
  • CAC 40 (France)
  • DAX (Germany)

South America:

  • MerVal (Argentina)
  • Bovespa (Indice Bovespa) (Brazil)

Read on as I battle with Jim Gillies to determine which region of the world deserves more love from investors:

Get a well-rounded view of your favorite Fools' top global stock picks with a copy of The Motley Fool'sInternational Report.

Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares). Wal-Mart and Microsoft areMotley Fool Inside Valuepicks. The Fool has a disclosure policy.

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Stephen D.

I'm an ex-Wall Street sell-side and buy-side analyst who has spent most of the last 10 years writing on a wide range of industries and investment ideas.

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