“If you can meet with Triumph and Disaster
And treat those two impostors just the same”
“If” – Rudyard Kipling
It’s a sunny Monday morning and during my drive to work a news update told of the desperate economic situation in Greece. For the last few weeks Greece has been attempting to obtain additional loans for funds to pay their debt obligation coming due June 30th. Without these funds they will surely be unable to pay creditors and will default. What happens after that is anyone’s guess. Greece has placed a restriction on the amount of money citizens can withdraw from their own bank accounts, which, unsurprisingly fuels the panic of an already fearsome situation.
Like so many stories on the news it can be difficult to relate to Greece given the relative stability of our own economy on this side of the Atlantic. However, in economics everything is somehow connected and the mere possibility of a Greek default will induce some sort of reaction in just about every global market. It’s a question of how big the reaction will be.
The European markets all took hits from 1.5%-3.2% today and when North American exchanges open up in a few hours there will likely be a similar drop in prices.
Source: CNN Money
If you actively monitor or even manage your own investment portfolio today may be painful or wonderful, depending on your situation and point of few. While this current market hit won’t help your current holdings, it’s also the perfect time to potentially buy additional investments while the market is in a lull. There’s no certainty the market will miraculously rebound in the next day/week/month/year, but if history’s any indication some time down the road the market will eventually regain the lost ground and continue on. You probably won’t see that in too many headlines (as it doesn’t make for an interesting story) but I’d be willing to bet my own portfolio on it.
To handle these downswings in the market you need to mentally prepare yourself beforehand to avoid doing anything too stupid. If you’re the nervous type, avoid doing anything rash. Actually, don’t even look at your portfolio today – if you feel the need to satisfy your trigger happy mouse finger read some more articles here on The Wealth Brick Road! For the responsible, level-headed investor, today will be just another sunny Monday in which they’ll continue on with their long term investment strategy. Today’s woe is tomorrow’s profit.