I recently read an article in The Wall Street Journal that proffered the theory that there are seven reasons why investors shouldnt dump international equity funds. Some of the key points in the article are that the euro already has fallen way off of its highs, and therefore cannot go down much more. The piece also argues that Europe will maintain its common currency, and that a weaker euro will bolster exports, which is good for European-based companies.

I think there is one huge reason why you should dump these funds, and that stems from the Fabian Plan recently issuing an international equity sell signal. But I thought that I would reply to this article directly, and address some of the common misperceptions about why things are going to be okay with international equities going forward. So, here are my seven reasons why you should dump your international equity funds.

Reason 1) The U.S. dollar is in a strong uptrend vs. the euro and other rival currencies. If the euro continues flailing, the flight of capital out of the eurozone will continue pounding stocks and, by extension, your international equity funds.

Reason 2) Europe is cutting spending, and the regions economies are floundering in a no-growth soup of their own making. One reason why stocks in Europe are falling is due to a coming recession precipitated by the painful debt situation in Greece, Portugal and Spain. Simply put, the age of austerity is coming to all of Europe.

Reason 3) Europe has a huge debt problem. European countries have too many social programs, and theyve made too many fiscal promises. Somewhere in Europe, there is going to be a massive debt default, and/or the servicing of existing debt will become such a burden that economic growth becomes virtually non-existent.

Reason 4) Mutual fund managers stay fully invested in down markets (they have to do so by charter), and that means they cannot manage risk. This holds true for international fund managers, who are essentially obligated to go down with the ship regardless of market conditions.

Reason 5) Nearly every major broad-based international mutual fund now trades well below its respective long-term moving average. The Dow Jones World Stock Index also trades below its 200-day moving average, meaning that risk continues to be high, and a new international bear market is on the precipice of becoming reality.

Reason 6) The slowing in the eurozone nations could begin threatening global economic growth and it could even cause a double-dip recession. China already has voiced concerns that its largest trading region is slowing rapidly, and this could be the economic contagion that many investors and economists fear.

Reason 7) Europe is raising taxes. From Greece to the United Kingdom, eurozone governments are trying to raise revenues to salvage their social programs and to service their debt. Whats really scary is that Europe could be a proxy for the United States in years to come.

These are just my top seven reasons why you should dump international equity funds, but the list is by no means complete. Suffice it to say, I am an international equity fund bear right now, so please dont fall for the rosy proclamations in the financial press.

The worst is yet to come for Europe, and that means there likely will be much more pain in international stocks going forward.

If youd like to find out more about the Fabian Plan and how it generates buy-and-sell signals that have beaten the market for more than three decades, then I invite you to check out my Successful Investing advisory service today.