The current situation in Greece presents a host of challenges to the global economy and related financial markets as well as the participants therein, including savers. The uncertainty arising from the situation and the potential consequences thereof has many parties on edge. There is, however, at least one potentially positive outcome from this situation.
Many product providers will have extolled the risk management embedded in their products and/or these products’ robustness in a range of market conditions. The events in Greece provide a real-life test of these claims. Are the risks (however defined) being managed within the specified ranges? If they are, you’ve likely got the product you’ve signed up for. If they’re not, it’s worth considering a change before an even more significant storm inevitably hits financial markets.
Greece joined the Euro back in 2001, contributing to the causes of the current crisis. That same year, Warren Buffett wrote in his Berkshire Hathaway Chairman’s Letter that “you only find out who is swimming naked when the tide goes out”. It seems that the tide might well be pulling back in investment markets, as well as on Greek beaches in the summer sunshine, at the current time. Has your provider been wearing trunks or are they about to be exposed?