We’ve heard from a number of clients and friends recently, asking us about Greece and the recent market volatility. Here is our succinct summation:
We feel awful for the people of Greece who have been caught up in the mess over there through no fault of their own. (Those who should take the blame, well….) It has to be a frustrating and frightening experience. The drama unfolding in Greece has certainly added to recent market volatility. However, it feels to us like – to borrow from Yogi Berra – “Deja vu all over again.” The things going on today in Europe are similar to events that occurred there only a few years ago. And, when you come right down to the real numbers, the real economic impact Greece has in the world, consider this: the entire size of Greece’s economy is roughly equivalent to the size of the GDP of the City of Philadelphia. Which isn’t much larger than the City of Detroit. The same Detroit that went bankrupt. If Detroit’s bankruptcy didn’t bring down the U.S. economy, we doubt that whatever happens in Greece will have any meaningful long-term impact on it either. So yes, the events in Greece are a tragedy of sorts (sorry, I couldn’t resist), but for the most part it’s a drama for U.S. households that is better suited for TV than for making changes in our long-term investment outlook.
On a lighter note, we want to wish all of our readers a very Happy 4th of July! We hope you spend it safely and in good company, good health, and good cheer!