Visiting Europe always provides me with fresh market insights and perspectives on investing. And without a doubt, most of the region is growing at its fastest clip in more than seven years. Interest rates are low, bank lending is buoyant and the European Central Bank (ECB), despite recently raising interest rates again last week to 3.75%, continues to expand the money-supply at its briskest pace in 15 years. The European Union (EU) is also logging a trade surplus with most member states in the black.

But some countries are flashing serious warning signals and I urge you to avoid investing in these markets. Latvia, Hungary, Estonia, Romania and Bulgaria harbor the worst internal fundamentals within the EU and actually, have higher debt levels now than most countries in Asia prior to the 1997-1998 Asian financial crisis.

One of the markets' biggest deficit warning signals is the current account deficit as a percentage of gross domestic product or GDP. Another matrix, the government's budget balance as a percentage of GDP shows big problems facing several emerging EU markets. Both indicators tend to flash red after a period of strong economic growth, similarly to what occurred in Asia in the 1990s.

Latvia is home to the worst deficit ratios in Europe. Its current account deficit as a percentage of GDP now stands at a whopping 18.5%. Not far behind and in worse relative shape is Estonia with a current account deficit at 12% of GDP. But markets with dismal twin current account and budget deficits are in worse fiscal shape, including Hungary, Romania and Slovakia.

As a benchmark, the United States harbors a current account deficit at over 5% of GDP and a massive budget deficit now over several hundred billion dollars.

As an investor, I look to invest in a market with solid or improving economic fundamentals.Today, these markets include Japan, Singapore, Taiwan, Germany, Canada and a few other countries sporting strong economic prospects. But one thing is for sure: I'm not investing in the Baltics or Eastern Europe until these economic imbalances are addressed or until the markets address these imbalances directly, usually in the form of an economic Day of Reckoning.