greek

Content provided by Grant Engelbart, CFA, CLS Portfolio Manager

As the market has seemingly put the Greek crisis behind it for a couple of weeks, I might as well bring it back up!  The media certainly hasn’t let it go. Financial news is still enamored with Greece.

The country, whose economy is the size of Connecticut’s, has been battling austerity and an economic depression to remain a member of the Eurozone. The impact on the Greek economy and stock market has been substantial. Over the past five years (since the “beginning” of the Greek crisis) Greek stocks have dropped 80%, and the economy has contracted in four out of the past five years.  However, what does it matter to the rest of the world? Previous commentary has focused on the size of the Greek economy and stock market (the Greek stock market is smaller than Bed, Bath, and Beyond’s market cap, for instance) and its actual impact on the world. It may seem too simplistic, but it isn’t – the global stock market has returned 67% over the past five years, and isn’t that what really matters? Eurozone stocks, which would likely be most impacted by the crisis, have actually outperformed the global market in local currency terms.

Focusing on the long term and ignoring the noise simply can’t be emphasized enough. Think of the wall of worry we’ve climbed the past several years– Russia, Ebola, China, Iran– and many of these issues are likely a much bigger deal than Greece. There will always be issues and crises around the world, but stick with your plan and ignore the (Gr)exhausting media.

MSCI All-Country World Index - Greece Debt Chart
The views expressed herein are exclusively those of CLS Investments, LLC, and are not meant as investment advice and are subject to change.  No part of this report may be reproduced in any manner without the express written permission of CLS Investments, LLC.  Information contained herein is derived from sources we believe to be reliable, however, we do not represent that this information is complete or accurate and it should not be relied upon as such.  All opinions expressed herein are subject to change without notice.  This information is prepared for general information only.  It does not have regard to the specific investment objectives, financial situation and the particular needs of any specific person who may receive this report.  You should seek financial advice regarding the appropriateness of investing in any security or investment strategy discussed or recommended in this report and should understand that statements regarding future prospects may not be realized.  You should note that security values may fluctuate and that each security’s price or value may rise or fall.  Accordingly, investors may receive back less than originally invested.  Past performance is not a guide to future performance.  Investing in any security involves certain systematic risks including, but not limited to, market risk, interest-rate risk, inflation risk, and event risk.  These risks are in addition to any unsystematic risks associated with particular investment styles or strategies.
2182-CLS-8/4/2015