Market Turmoil = Opportunities for Disciplined Investors

"People focus too little on the opportunities that problems present," said our founder, the late Sir John Templeton. This idea-opportunity in the midst of crisis-was central to his investment philosophy. However, the Templeton approach requires three factors that many investors find daunting: discipline, patience and the strength to look past the short term. The latter is not always easy to do, as Sir John himself realized: "To buy when others are despondently selling and to sell when others are avidly buying," he noted, "requires the greatest fortitude and pays the greatest ultimate rewards."

The last few weeks have certainly provided investors with a plethora of both crises and opportunities. Sovereign debt problems in Europe have dominated the headlines, with the predictable result of an investor flight from stocks in the region. While we do not wish to discount these problems, which are indeed considerable, we believe many investors have been acting as they typically do: panicking and selling, often at a loss, on distressing short-term news.

Templeton's approach is different. As we have done since Sir John founded the firm in the 1940s, we look past short-term events to five years in the future, buying companies that we believe have the potential to improve significantly over that time period. We take macroeconomic developments into consideration, but our focus is always on individual companies-specifically, those experiencing short-term challenges but that have the potential to increase their value over our long-term investment horizon.

As a result, our strategy has not changed. We believe Europe is still home to some of the highest-quality companies in the world, many of which lately have been selling at bargain prices. In fact, we think European markets carry some of the cheapest valuations anywhere in the world, and feature stable high-quality enterprises with excellent global growth opportunities.

It is also important to remember that Templeton's exposure to the region is focused on multinational corporations with diverse global revenue streams rather than enterprises overly reliant on domestic demand growth to drive revenues. And while we have witnessed sentiment in weaker European states such as Greece, clearly deteriorating, key fundamentals in the broader region-economic indicators and corporate earnings-have been generally improving.

The recovery is still very fragile, and investors have grown increasingly anxious in recent weeks. We believe that any further dramatic swings in sentiment are likely to cause market volatility in the short term, but long-term investors could potentially take advantage of select opportunities that may emerge from the turmoil. As well as keeping a close eye on the response of regional and global policymakers to the escalating crisis, we believe investors would do well to bear in mind, once again, the words of Sir John Templeton: "People are always asking me where the outlook is good, but that's the wrong question. The right question is: Where is the outlook most miserable?"

Please click for more information on the following:
FTIF - Franklin Templeton Global Equity Strategies Fund
FTIF - Franklin Templeton Global Fundamental Strategies Fund
FTIF - Franklin Templeton Global Growth and Value Fund
FTIF - Templeton European Fund
FTIF - Templeton Global Fund
FTIF - Templeton Global (Euro) Fund
FTIF - Templeton Global Balanced Fund
FTIF - Templeton Global Equity Income Fund
FTIF - Templeton Global Income Fund
FTIF - Templeton Global Smaller Companies Fund
FTIF - Templeton Growth (Euro) Fund
FTIF - Templeton U.S. Value Fund

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