It is important to note that in this post I am pronouncing the word gyro as “yee-ro”. This is critical because no one is allowed to pen commentary on the Greek situation (I almost typed ‘tragedy’) without at least a little halfhearted wordplay.
The odds of a Grexit keep going up, but before Greece can leave the Euro, Europe must allow Greece to default by not extending a last-minute unearned bailout. In other words, Europe must leave the Gyro. It looks like Greece has run out of road to kick the can down and we’ll finally get to see the next act of this tragedy (I can’t help myself) soon.
What does this mean for investors? We’re seeing red numbers all over financial television in between ‘man on the street’ spots of reporters interviewing Greeks standing in line at banks or ATMs. People are speaking in urgent tones on TV, this must be a time for action, right? Probably not. Despite some economists’ view that this is all happening too fast, this slow motion train wreck has been going on for five years and should come as a surprise to no one. This has given investors plenty of time to prepare.
Prepare to do what? Nothing, ideally. It takes just as much, if not more guts to hang on through turmoil as it does to make trades in reaction to the news. I find that the more action that goes on in a portfolio, the larger the opportunity for bad things to happen and in greater magnitudes than if the investor had trusted themselves to follow their plan. This may be a great time to rebalance, but not to panic. Save panic for a real crisis. In the meantime, check out Josh Brown’s take on Greece.