A Real “Greek Tragedy” Unfolding
Unlike the mythical accounts of personal tragedies as depicted in ancient Greek culture and famous writings by Sophocles and others, a real Greek tragedy is unfolding as recent national events and decisions in Greece are leading that nation into a long-term financial calamity. Creditors have required the current Greek socialist government to accept certain austerity measures that could save the country; the fact that the Greek government refuses to do so is the real tragedy. How will this avoidable tragedy adversely impact the rest of Europe, the U.S., and other global economies who do business with Greece? We believe the impact will be minimal and in fact, may cause a better short-term buying opportunity for investors focused on the improving U.S. economy and quality investments in U.S. stock markets.
In June, the U.S. stock market as represented by the S&P 500 Index lost 2.1% and realized a minuscule gain of +0.2% year-to-date primarily due to the most recent events surrounding the Greece bailout negotiations. While the drama will continue into July, the negative dynamics of both sides raise expectations that Greece will leave the European Economic Zone rather than accept the austerity pain brought upon itself by many years of leftist government overspending. It appears that the unfortunate people of Greece are led by a suicidal socialist government hell-bent on self-destruction. The good news is that Greece may be the spark that causes an overdue U.S. stock market correction (as we said could happen in our May Monthly Stock Market Report). If so, we believe an excellent buying opportunity will result. It is most important for investors to stay calm – do nothing – and simply watch this “Greek tragedy” play out. Get a free registration here to stay atop these developments and our views.
Since our TSOA Retirement Allocation Models are based on a sound dollar-cost averaging investment method, we suggest investors maintain their asset allocation formula and add to their portfolios in our models despite this “real Greek tragedy.” In addition, we suggest that investors add to their holdings from our recent “buy” recommendations (i.e. CCL, NCLH, RCL, GE, SIX, and others listed in our earlier Monthly Stock Market Reports back to June 2014) in case better prices in these U.S. stocks occur during any short-term “correction” period. Also continue to avoid WYNN, LVS, and MGM.