It is now five years since the Greek crisis started, and during that time it appears to have gone through as many starts and stops as a rush hour commute. The trouble is, the crisis has been so protracted, and has been through so many twists and turns, that it has become increasingly hard for even the most diligent investors (or investment professionals) to keep track of them all.
So what is one to do? If one would have ran for "investment cover" five years ago, one would have missed out one of the best market recoveries in history. Yet, a succession of wise-sounding experts keep telling us it is five minutes to midnight, or even three or two minutes. But midnight never quite arrives. It is very easy for the average investor just to tune out the whole thing, and stop paying attention. So, back to what to do?
It is times like these that remind us that trying to predict market movements is a fool's game. Fact is that there are always geo-political events that effect markets, just as there are always company events, interest rate events, currency events, weather or natural resource events. All of these events collectively influence the markets every day, yet which one is making the most noise or largest headlines is usually the most worrisome (or is that the other way around?). Ironically, it is usually not the predictable events that upsets the markets the most, but rather the events not foreseen or predicted.
So, am I suggesting to stop paying attention? NO, pay attention, but make sensible changes according to your current risk appetite and time horizon. After all, if Greece does make it through this week/month/year, which I believe it will, and manages to scratch together a livable deal, there will still be endless deadlines to be met stretching out for years.
So while a sudden and reckless Grexit remains a risk to any portfolio, trying to predict it's timing and its antidote ahead of time may prove more damaging to your portfolio return, than doing nothing. In this case, doing nothing may in fact be the best thing to do (or not do).
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