If the best time to buy stocks is when there’s blood on the streets, investors had best fly to Europe. Bargains in the stock market only flow from financial uncertainty and fear -- not glowing prospects and euphoria. The European powers that be will likely use the same prescription as the U.S. and Japan and apply more stimulus. That, in turn, should resuscitate Europe’s stock market as it did the other two countries’ markets.

The Federal Reserve’s third round of quantitative easing, a.k.a. QE infinity, announced September 13, 2012, has since lifted the S&P 500 up 42 percent through November 25. Japan’s version, known as Abenomics, has boosted its stock market 70 percent. The European Central Bank’s balance sheet, currently totaling $725.5 billion, is a far cry from its all-time high of 1.14 trillion euros in August 2012. So expanding the balance sheet from current levels would be considered reasonable.

Benchmark interest rates have been hammered to a new record low of 0.05 percent from 0.25 percent at the start of the year. When there is no incentive to invest in risk-free assets, the stock market presents the best opportunity for yield income and capital appreciation, especially at its current low valuations.

The Vanguard FTSE Europe ETF (VGK) -- the largest European ETF by assets -- trades at 15.6 times earnings, 1.7 times book value and 1 times sales while yielding 3.3 percent. It has shed 2 percent year to date. By contrast, the SPDR S&P 500 ETF (SPY) trades at much higher valuations while paying a slightly smaller dividend. SPY has a price-to-earnings ratio of nearly 18, a price-to-book value of 2.45 and a price-to-sales ratio of 1.7 while yielding 2 percent.

The iShares MSCI German ETF (EWG), which tracks Europe’s largest economy, trades at a forward p/e of 14. It has a price-to-book ratio of 1.6 and a price-to-sales ratio of 0.75 while yielding 2.6 percent. EWG has tumbled 8 percent year to date, through November 25. The benchmark iShares MSCI EAFE ETF, tracking foreign developed markets, outpaced it by dipping only 1.4 percent, while the S&P 500 jumped 14 percent. The law of mean reversion will eventually turn the tide. Institutional investors will naturally want to book profits in the U.S. stock market (as it scales new heights by the day) and redeploy the capital in undervalued areas.

German corporations stand to benefit from a weak euro, which will make exports more competitive, and from oil price declines that will lower the companies’ production costs. Exports slipped 0.2 percent, quarter over quarter, during the first three months of the year. They rebounded in the second quarter, increasing by 1.2 percent over Q1, and then jumped 1.9 percent in the third quarter. A healthy labor market and strong wage growth amid falling oil and food prices have given consumers more spending power. In addition, consumers have no inclination to save when interest rates are zilch.

“Domestically, Germany's private consumption remains solidly underpinned by pent-up demand, ongoing robust increases in disposable income, softening inflation and a recent return to a declining unemployment trend,” wrote Timo Klein, senior German economist at IHS Global Insight, in a report issued November 25. Also, a better financing environment has helped residential construction, he says. Residential construction has furthermore seen a structural boost in demand with unexpectedly large increases in immigration during the last two to three years, he adds.

IHS forecasts that German gross domestic product growth will accelerate from 0.2 percent in 2013 to 1.4 percent in 2014, to 1.6 percent in 2015 and to 1.9 percent in 2016.

We must remember that we’re investing in companies and not countries. Whether European governments are making the right moves is debatable, but companies are. When the economy appears on the verge of collapse, companies become ripe for turnarounds, takeovers, spin-offs and restructurings.

Philip J. DeAngelo, is the owner and managing director of Focused Wealth Management, an SEC-registered investment advisor with $420 million in assets under management in Highland, N.Y.