DON’T GET TOO FANCY TRYING TO PLAY THE GREEK DEBT CRISIS IN THE FINANCIAL MARKETS!

It’s been almost five and a half years since the Greek Debt Crisis first became public knowledge.  Since then, the various European financial ministers have met, talked and discussed options.  But, the key word here is “Talk”.  That’s part of the problem: unanimous agreement is virtually required, both in the Eurozone, the countries that share the common currency, and in the overall European Union.  So, what happens if Greece defaults on its Debt?  Leaves the Eurozone?  Europe has a failed state in its midst?  What does the average investor do?

Over the past several weeks, global stock and bond markets have been zigzagging–up one day on news of a potential solution, and down the next as the optimism is dashed.  The important thing is to tune-out the noise.  As long as this crisis has been going on–and with the potential for fall-out to other countries–things won’t change overnight?

As always, it is wise to review your portfolio during any sort of crisis.  Are your various securities ones that you are comfortable with–now and in the future?  Trading in and out of the markets is generally good only for the financial firms that generate revenue when you do so.  If you like what you have, stick with it!

Stay away from investing in the Euro if possible; however, there are some excellent companies that are located in Europe. Remember that all 28 members of the E.U. will be effected by a Greek default, whether they use the Euro or not.  There are some mutual funds and exchange-traded funds, by the way, that invest in European stocks and bonds; but, they are negative “short” the Eurocurrency.

Also, consider your risk-tolerance. If you are skittish about what is going on, you might sell-off some investments that you are not confident about or, perhaps, lighten-up a little, across-the-board.  Market down-turns generally provide future buying opportunities.  But, only do so if, and when, you are ready.  Otherwise, park some cash and keep it safe.

Assuming that you are investing for the long-term–a young child’s education, your future retirement or maybe you are already using your investments to supplement other retirement assets.  Either way, during volatile markets, merely working around the edges can often be the best strategy.

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  1. #1 by Mervin on June 17, 2015 - 10:10 AM

    I feel this is among the so much important info for me.
    And i’m glad reading your article. However want to commentary on some basic things, The web site
    style is ideal, the articles is really excellent :
    D. Good job, cheers

    • #2 by cheekos on June 17, 2015 - 1:47 PM

      Mervin, thanks very much for visiting my blog…and for your comment.

  2. #3 by cheekos on June 18, 2015 - 3:04 PM

    There are two significant problems is the formation of the Eurozone–the member nations (currently 19) that share the common currency, the Euro:

    1. Yes, there are conditions, which must be adhered to, in order to join and to continue membership. However, those rules do not appear to be enforced.
    2. Both the EU and the ECB are run like country clubs. All meetings are quite collegial and decisions are generally expected to be virtually unanimous. When you consider that some of the other countries are quite weak themselves, they might be reluctant to deal too harshly with Greece.

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