U.S. investors are voting with their feet when it comes to European stocks and they are jumping into them in a big way, according to the Financial Times.

During the first half of 2013, American investors flung more money into European equities than at any time since 1977 — about $65 billion from pension funds and other major sources, the newspaper said.

"There are still a lot of pessimists out there, but the cheapness of stocks makes them attractive. The risks are outweighed by the positives and I think European stocks can definitely move higher," said Robert Parkes, an equity strategist at HSBC.

Editor’s Note: 5 Reasons Stocks Will Collapse . . .

He predicted upside earnings surprises "will act like a tailwind for Euopean equities."

The Times reported signs of economic recovery and higher business confidence have led U.S. investors to conclude a wave of stronger earnings may emanate from Europe in the second half of 2013.

Eddie Perkins, chief investment officer of international equity at Goldman Sachs Asset Management, said, "The economic story makes Europe a good bet. We expect European equities to keep rising as the continent recovers."

Despite risk posed by the Syrian crisis, emerging markets instability and the possibility of a new wave of eurozone fiscal distress, the Times said, "European stocks remain cheap."

European sectors in favor at Goldman Sachs and HSBC include financials, telecoms and utilities.

Mark Luschini, chief investment officer at Janney Capital Management in Pittsburgh, told The Wall Street Journal that small-cap European stocks may be a wise investment choice.

Financial conditions in the region have recovered to the extent that "it makes sense now for investors with a large-cap bias to tilt more of their portfolios to smaller and more nimble companies that are well-suited to take advantage of Europe's recovery," he predicted.

European stocks posted their best weekly gains in four months last week, Bloomberg reported.

"The global economy is slowly healing, though we're still nowhere near being given the all clear," said David Hussey, head of European equities at Manulife Asset Management in London, told Bloomberg. "The nub of it is whether the Fed will allow rates to appreciate more slowly, but the place to be will be in equities."

Editor’s Note: 5 Reasons Stocks Will Collapse . . .