Global markets have been diving as the economic turmoil in Greece unfolds, but while Greece’s economic future is unclear, the question many Americans are asking is: what does this mean for my investments and finances? While the effect of Greece on the rest of the world’s markets is still relatively unclear, the United States has limited direct exposure to Greece. The Greek economy is roughly the same size as Connecticut, and accounts for less than 1 percent of all U.S. trade—primarily in vegetables. Furthermore, U.S. investors have had years to limit their exposure to Greece fallout since the beginning of the crisis in 2008.
The real and legitimate economic concern is widespread financial panic. Federal Reserve Chair Janet Yellen said that she does, “see the potential for disruptions that could affect the European economic outlook and global financial markets…to the extent that there are impacts on the euro-area economy or on global financial markets, there would undoubtedly be spillovers to the United States that would affect our outlook as well.” While the risk is certainly legitimate—a rapid outflow of funds could destabilize other European countries, like Spain and Italy—European officials believe a deal can be reached and a Grexit averted.
In the immediate short term, experts predict that stock and bond markets will be volatile. Last week, Asian stock markets fell by roughly 3 percent and European markets were down nearly 4 percent. U.S. futures trading suggests modest, but still significant, drops of more than 1 percent.
As Greece and the Troika (the European Commission, European Central Bank, and IMF) wrestle with an economic package, investors here in America can protect their investments and assets while bracing for a potentially bumpy market ride. An expert at Apex Financial Advisors can help examine and revise your assets to mitigate any disruption from Greece and Europe. Financial preparedness at home can insulate you and your family’s wealth from tremors in the market. After all, Greece’s lack of financial preparedness and realism in 2001 is a leading cause of their financial distress today.