Europe’s stock market has lagged the U.S. by a margin as wide was the English channel this year and investor dollars are gushing out like water from a firehose. The eurozone has a nearly 40 percent chance of falling back into recession in the first half of 2015, according to the International Monetary Fund. The economic data may spook investors, but there’s no correlation between economic growth and stock market returns when it comes for foreign investing. European stocks offer deep value for long-term investors. The stock market should rebound as falling oil prices stimulate consumer spending and improve business profits. At the same time, a weak euro spurs demand for exports and tourism.

The MSCI Europe Index fell 7.5 percent year to date (through Nov. 13), trailing the U.S. stock market’s 10 percent year to date, according to MSCI. Portugal and Austria have plunged into bear markets, tumbling 33 percent and 26 percent, respectively, year to date (through Nov. 13). Greek stocks, -34 percent year to date, plunged after the Minister of Administrative Reform, Kyriakos Mitsotakis, said uncertainty will prevail until the elections in February.

During October investors pulled $2.1 billion out of Vanguard FTSE Europe ETF (VGK), the largest ETF by assets tracking the region, according to iShares MSCI EMU (EZU) bled $558 million while SPDR Euro STOXX 50 (FEZ) experienced $376 million in outflows. Euro Area Sentix Investors Sentiment index fell to -14 in October after falling into negative territory for the first time this year in September, data show. It has improved slightly to -12 this month. The contrarian indicator reveals investor sentiment is most positive at market tops and most negative at market bottoms. The index soared to an all-time high of 42 in June 2007 near the previous bull market top and crashed to a record low of -43 in March 2009 -- the same month the current bull market kicked off.

I recommend investors have at least 5 percent of their portfolios allocated to Europe via iShares International Select Dividend ETF (IDV) with $4.4 billion in assets under management. It’s trading at a steep discount compared with the U.S. and yields nearly 5 percent. It’s trading at only 14 times earnings while U.S. large caps trade at 16. It’s price-to-book ratio of 1.7 is much lower than the U.S. P/B ratio of 2.5. IDV’s price-to-sales ratio of 0.7 is less than half that of the U.S. at 1.9.

Economic data of out of Europe are horrible as they should be in order for its stock market to climb the proverbial wall of worry. Eurozone manufacturing PMI in October edged up to a reading of 50.6 -- barely above the 50.0 level that indicates flat activity. It improved slightly over September’s reading of 50.3, which marked a 14-month low.

“Heightened geopolitical tensions particularly related to Russia/Ukraine have weighed down on confidence across the Eurozone, reinforcing still challenging conditions in many countries, and this has likely caused some orders to be delayed or even cancelled,” Howard Archer, chief U.K. and European economist at IHS Global Insight, wrote in a note Nov. 3. “Meanwhile, credit conditions are currently still tight in many countries, unemployment is still elevated and seems likely to creep down at best over the coming months, private and public debt levels remain high in several countries, while consumer purchasing power is constrained by generally limited wage growth.”

But manufacturers’ margins should improve, thanks to lower oil prices and the euro hitting a two-year low against the greenback. A weak euro makes the region’s exports and tourist destinations more attractive.

The Bank of Japan threw a massive treat at the global markets on Halloween, when it announced it plans to increase annual government bond purchases by $723.4 billion on top of buying ETFs and Japanese REITs. Success in the Bank of Japan’s quantitative easing program severely pressures the European Central Bank to engage in more quantitative easing and buy more bonds, which would be bullish for the stock market.

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.