Dow Jones Industrial Average (.DJI), JPMorgan Chase & Co. (JPM): Is Investing in America Right for the Global Investor?

Spain’s still mired in its crisis as unemployment surges, recently topping 27% for 2013’s first quarter, with little hope of a major turnaround in sight. Still, some Spanish stocks have managed to push higher in 2013. While it hasn’t matched the likes of the Dow Jones Industrial Average (INDEXDJX:.DJI)’s rise, Spanish financial firm Banco Santander, S.A. (ADR) (NYSE:SAN) has seen shares rise more than 3.5% in 2013. The company’s dealing with a recent CEO change, but between its high dividend that yields nearly 11% and its smart expansion into Latin American nations in order to mitigate European exposure, Santander’s one of the best-positioned Spanish stocks for investors willing to take a gamble on picks in one of Europe’s most beaten-down economies.

If you’re looking for a country too cheap to ignore, however, it’s impossible to overlook China. The Chinese economy has been stuck in neutral — by its standards — recently, posting just 7.7% GDP growth in 2013’s first quarter after realizing double-digit growth as recently as 2010. Chinese stocks average a P/E of just 8, according to the Financial Times, cheap enough to make them the least-expensive stock on the Dow Jones Industrial Average (INDEXDJX:.DJI). Only JPMorgan Chase & Co. (NYSE:JPM), with its P/E of 8.5, comes close, and the major bank has struggled with regulatory scrutiny recently that has inspired caution, not optimism, in this top financial pick — despite topping earnings expectations in its most recent quarter.

Investing in China represents far more of a risk than the likes of JPMorgan Chase & Co. (NYSE:JPM), despite whatever hurdles regulators can throw at the big bank. Despite strong growth in past years that has propelled China’s economy to the second-largest in the world, the bubbling housing market, rising middle class, and poor infrastructure climate will challenge the nation in the coming years. If investing in China’s growth story tempts your hand, it’s better to find a buy among the strongest global companies betting on the leading emerging market’s growth. Industrial giant Caterpillar Inc. (NYSE:CAT) has hitched much of its future on China, and while slow sales have hit Caterpillar Inc. (NYSE:CAT) hard lately, this is one stock that’s poised to capitalize in a significant way of Chinese economic growth picks up in the future. At a cheap P/E, Caterpillar — which sits atop the cyclical industrial industry — is a safe pick to invest indirectly in China.

The article Is Investing in America Right for the Global Investor? originally appeared on and is written by Dan Carroll.

Fool contributor Dan Carroll has no position in any stocks mentioned. The Motley Fool owns shares of JPMorgan Chase.

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