The presidential election is looming large in the United States, as the candidates continue to debate a number of issues that are key to the voting public. There is one rather pressing question that remains unanswered, however, as neither Barack Obama or GOP challenger Mitt Romney have been forthcoming in how they would negate the issue of the anticipated fiscal cliff. The most likely reason for this omission is the sheer magnitude of the austerity measures that would be required, which are hardly likely to endear either candidate to the public.

The fact remains, however, that the federal budget deficit has topped $1 trillion for the fourth consecutive year, which, despite the effects of a modest economic improvement at the turn of 2012, remains uncomfortably high. With this in mind, and despite the understandable trepidation of U.S. business owners and taxpayers, certain economists have suggested that leaping from the fiscal cliff may be the only way to lead the country forward over the long term.

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Fear, Perception and the Financial Markets
Therefore, the prevailing sense of panic and resistance among U.S. citizens may not only be considered as short-sighted, but also indicative of how fear and trepidation can be more damaging to an economy than the event that inspires it. Interestingly, investors appear to be impervious to such trepidation, despite warnings from Wall Street that the impact of huge tax hikes and significant public spending cuts may be too much for the market to bear. As the deadline of January 1 looms large, the vast majority of investors remain optimistic that warring government factions will reach an amicable accord.

While some may consider this foolhardy, investors have their reasons for remaining calm in the face of perceived adversity. Those who are experienced in the financial market understand its volatility and precarious nature, and therefore, have a long-term investment strategy that has been carefully developed to deliver long-term gains. It is inconceivable to change this each time there is a potential market setback, as such a philosophy would inevitably lead to diminishing financial returns and significant losses over a period of time.

SEE: The 3 Most Timeless Investment Principles

Why European Stocks Remain a Bargain for Long-Term Gains
The flexibility of the financial market is also unique and provides ample opportunity for courageous investors, even during periods of economic decline. The continuing eurozone crisis provides a relevant case in point, as the deepening economic gloom and depressed sentiment surrounding nations such as Greece, Spain and Portugal has driven commercial stocks and prices down to bargain valuations. With the option to buy long for committed and experienced investors, now is the ideal time to raid blue chip European stocks, such as Telefonica (NYSE:TEF), for long-term gains.

Take Heineken (OTC:HINKY) for example, which remains Western Europe's single largest and most prolific brewer. Its stock price has plummeted by 17% during the last 12 months, for no other reason than the fact that it is a brand synonymous with Europe and one that has, therefore, been unfairly associated with economic decline. Wise investors have been quick to purchase these low-priced stocks, however, safe in the knowledge that Heineken continues to achieve increased profit margins through its sales to emerging economies outside of the eurozone.

Finnish engineering giant Kone (OTC:KNYJF) is another European firm that continues to provide a long-term option to investors, as it boasts both outstanding exposure to global growth and increasingly competitive market positions. While the European firm's sales activity remains relatively strong even in the face of wider economic decline, it has also benefited significantly from a strong business relationship with clients based in the Asia-Pacific region. This has contributed to an average annual dividend growth of 15% over the course of the last five years, while the company recently announced that it would be paying an additional dividend to shareholders in November.

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The Bottom Line
The lesson to be learned is clear, as falling stock prices and value are often inspired by the decline of a region's economy rather than the individual company involved. As brands such as Heineken and Kone have showcased, there are a number of European firms that continue to remain profitable and expand their business outside of the afflicted eurozone region, which in turn creates an outstanding opportunity for streetwise investors to boost their exposure and achieve long-term gains.

So the optimism of investors in the face of perceived economic crisis is well founded, as many have an intuitive knowledge of the financial markets and the fundamental laws that govern price movements. Subsequently, patient and committed traders have found solace in the continuing eurozone crisis, which appears to have eased in recent times as European stocks have begun to climb steadily. This means that they could profit sooner than many would have anticipated, just in time to prepare for the next impending financial crisis.

At the time of writing, Lewis Humphries did not own any shares in any company mentioned in this article.

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