German Stock Market Thrives Despite Economic Struggles

Not long ago, the German economy was the envy of Europe. It had low unemployment, sound fiscal policies and exported luxury cars and value-added industrial goods to a growing global economy. Germany was a poster child for the benefits of globalization. However, recent years have not been so kind.

There is virtually no economic growth, business bankruptcies are soaring, and the once-competitive German industrial giants are fighting for survival. Given the dim outlook, one might find it odd to see the DAX index make new all-time highs. How can the stock market be so strong when the economy is so weak?

The DAX
Global X Dax Germany ETF
, the German blue-chip stock market index that tracks the performance of the 40 largest companies trading on the Frankfurt Stock Exchange, is up 11.8%, significantly higher than the 7.5% return for the…