How does the Greek default affect your short term investment strategy?

[sunday]

Does the Greek default change anything for you? I'm strictly into index funds and not looking to FIRE anytime soon, but I'm trying to reason out how the market may react. So since Greece defaults, the Euro will likely lose value, which drives up the Dollar and decreases exports. How do you think this will play out for your investments short and long term?

[sirdoug007]

Nope.

It's funny to read what people thought would happen today vs. reality.  Many were calling for a huge selloff, even in the US.  Reality is the S&P500 is down 0.37% today, the Euro unchanged!  This "crisis" has been really boring so far.

If you are far from FIRE you should be rooting for a dip to buy some stocks "on sale."

[sunday]

Actually, I am indeed looking forward to my funds being "on sale." Maybe wait a bit before injecting the next supply of money into buying them.

[dandarc]

I went ahead and bought today as planned.  Woohoo for the .3% discount!

[Jack]

It tempts me to vacation in Greece.

Stocks are unchanged because the "crisis" has already been priced in for a while now.

I do need to buy some international (and/or emerging market) funds, but that's because I liquidated the ones I had a few months ago due to a temporary need for cash, and now should put them back. (In other words not because I'm changing my intended asset allocation.)

[sunday]

I thought about visiting Greece but it seems a lot of the shops there aren't taking credit cards because they're afraid of not getting paid. I would not be comfortable carrying a large amount of Euros or Dollars on my person at this time.

[Daisy]

I'd wait some time for this whole crisis to shake out.

I've read there could be some credit default swaps related to Greek debt lurking out there that may get hurt, similar to 2008, and those effects haven't been felt yet. But who really knows...

I don't think waiting a bit will be too harmful as we have been in a 7 year bull market and I doubt things are going to jump up in price with the crisis going on, so it's safe to have a wait-and-see attitude until more information is known. Don't most stock market crashes occur in the fall though? Maybe this is a Lehman type moment that takes some time to brew and we will see a crash in the fall.

But who really knows...

[johnny847]

It doesn't change a thing. Stay the course.

[2Birds1Stone]

Purchased $1500 of VTSAX today.

[hodedofome]

Does the Greek default change anything for you? I'm strictly into index funds and not looking to FIRE anytime soon, but I'm trying to reason out how the market may react. So since Greece defaults, the Euro will likely lose value, which drives up the Dollar and decreases exports. How do you think this will play out for your investments short and long term?

Yeah, and I've also read that the Euro will likely GAIN in value after a Greek default as the German economy will be that much more of the Euro currency and will cause it to rise.

In reality, we all speculate but nobody really knows.

[fb132]

I was expecting a huge drop today, I was kind of disappointed because I had 2K$ to invest. I still invested because I don't believe in timing the market, but I was still a little disappointed...I was actually surprised no one panicked. Maybe it's a matter of time before people go dumb and sell their stuff.

[Financial.Velociraptor]

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

[fb132]

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

That 0,4% caused some panic last week when the market dropped around 2-3%

[forummm]

It doesn't change a thing. I just keep buying every paycheck. If I was RE, I would just keep doing whatever I was doing. If I were RE and they went off the Euro, I might go visit. They would have some bargains.

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

That 0,4% caused some panic last week when the market dropped around 2-3%

And then it went back up. Markets are irrational. Don't join them in that.

[fb132]

It doesn't change a thing. I just keep buying every paycheck. If I was RE, I would just keep doing whatever I was doing. If I were RE and they went off the Euro, I might go visit. They would have some bargains.

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

That 0,4% caused some panic last week when the market dropped around 2-3%

And then it went back up. Markets are irrational. Don't join them in that.

Oh but I haven't, I still invested today even though it didn't drop and I would of still invested had the market tanked today. I agree with you, I don't sell when the stock market has a rough day, I only said I was disappointed it didn't drop today because I had 2K to invest. I would of bought more stocks on sale.

[Rural]

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

That 0,4% caused some panic last week when the market dropped around 2-3%

And happily I was right at the point of dropping $12.5k into the market at that drop. Sale prices!

[Left]

I bought up $10k of vxus last week :( boo for poor timing, but oh well. I'll just get some more money later and buy again

[Kalergie]

I don't have a short term investment strategy.

[dungoofed]

You guys are a lot more calm than the quants I spoke to yesterday. If I were a betting man I'd short the entire region. And China certainly isn't helping things lol

[johnny847]

You guys are a lot more calm than the quants I spoke to yesterday. If I were a betting man I'd short the entire region. And China certainly isn't helping things lol

Pretty sure most quants are not in it for the long haul.

[mrpercentage]

No. Im ditching short game-- too unpredictable. Im building some cash for now because I should have some-- not just an investment strategy. I refuse to go back into debt, and with the market going down, I don't want to be forced to sell some stocks at the wrong time. Cramer does keep talking about the "Super Freaking Strong Dollar". I figure it looks like a pretty good strategy for now.

Greece, interest rates, China-- this next year will have a lot of chop. Short gamers better be really good or they are going to get hurt bad on big fast moves. Im losing on everything but Disney, Escalade Sports, and JP Morgan. Those three are holding the tent up for me @ 4.2% YTD. Ford is killing me but compounding new shares in nicely.

[dungoofed]

Yeah I jokingly told one of my buddies that I was going to use Decision Moose to time my entry and exit into European stocks, he spent the next 30 minutes telling me why this was a bad idea lol

[I'm a red panda]

I don't have a short term investment strategy.

This will not change how I buy. My asset allocation will not change.  My international exposure ratio isn't going to change either.

[Jack]

Cramer does keep talking about the "Super Freaking Strong Dollar".

Well, shit. So much for the dollar!

(Nah, I'm just kidding. Cramer may be often wrong, but unfortunately he isn't reliably wrong...)

[Heckler]

I have been wondering if I should buy my Canadian index instead of the short term bonds I was planning to buy.  The Cad is on a bigger sale now, but I'm still 7% lower than intended asset allocation for the ST bonds.  Dammit.   

[ender]

It means the time our first digit of net worth will change keeps being elusive :)

[Kaspian]

Greece GDP is less than 2% of Euro GDP and about 0.4% of global GDP.  You should worry about as much as you'd fret if the US lost South Dakota.

I was going to say the same thing.  Don't get me wrong, I've been to Greece, LOVE it and the people but it's a lot of posturing from a country which doesn't matter economically.  The fact that hubris is a Greek word shouldn't be lost on anyone.  It has less than the population of Ontario and half the GDP.  ...What?  Olive oil?  A country can't expect to spend and be as economically rich as the G7 if they're depending of freakin' olive oil.  If economy's the case, Mexicans should be enjoying a much higher lifestyle than Greeks.  Hell, even Romania has more going for it. 

Anyway, it doesn't matter--they've mostly been written off the books years ago.  The only reason anyone should even pay attention is that it's the first small crack in the EU's armor.  Don't think it'll fall apart or anything, but it sets a bad precedent.

[Left]

What?  Olive oil?  A country can't expect to spend and be as economically rich as the G7 if they're depending of freakin' olive oil.

but canada only depends on maple syrup... :D

I'm just confused on the entire Greece thing when talking about the stock market... just because Greece the country bankrupts, that doesn't mean the companies do... sure it makes it hard to do business but if they move, why would that alter how the stock works? I mean, if stocks are ownership of the company, unless the company goes under, you still have the same shares in the company before and after Greece defaults/whatever.

[forummm]

What?  Olive oil?  A country can't expect to spend and be as economically rich as the G7 if they're depending of freakin' olive oil.

but canada only depends on maple syrup... :D

Um, oil, cars, machines, diamonds, gold, wheat, soy, timber, etc...

[Jack]

What?  Olive oil?  A country can't expect to spend and be as economically rich as the G7 if they're depending of freakin' olive oil.

but canada only depends on maple syrup... :D

The sad thing is, Greece is (relatively) small potatoes even for olive oil, producing only about 10% of the world's production. In comparison, Italy produces about 20%, and Spain produces about 40%.

[fb132]

I have been wondering if I should buy my Canadian index instead of the short term bonds I was planning to buy.  The Cad is on a bigger sale now, but I'm still 7% lower than intended asset allocation for the ST bonds.  Dammit.

It is expected that Canada will go into recession soon, so I wouldn't be surprised if it goes down even more, therefore more stocks for sale :)

[AnAmericanAbroad]

Tax loss harvesting! Did my first of the year yesterday with VEMAX (Vanguard Emerging Markets). I was considering tax loss harvesting VTMGX (Vanguard Developed Markets) but my position isn't big enough to make the loss worthwhile, so I'm just dropping in my savings as my asset allocation calls for.

[johnny847]

Tax loss harvesting! Did my first of the year yesterday with VEMAX (Vanguard Emerging Markets). I was considering tax loss harvesting VTMGX (Vanguard Developed Markets) but my position isn't big enough to make the loss worthwhile, so I'm just dropping in my savings as my asset allocation calls for.

Haha I may get there too, but I bought some shares a couple days before the Greek announcement, so I can't yet.

[sol]

Reality is the S&P500 is down 0.37% today, the Euro unchanged!  This "crisis" has been really boring so far.

If you are far from FIRE you should be rooting for a dip to buy some stocks "on sale."

VWO is down under $40/share today for the first time in a few months.  That's sort of my threshold for putting play money into emerging markets, so today I went BIG and bought... one share.

[SpicyMcHaggus]

I will stock up on Gyros and cucumber sauce.

[RichMoose]

The market goes up, the market goes down. Greece has about zero impact on the ability of my companies (US + CAN Index) to earn money. I bought $4k worth yesterday, just like I try to do every month.

@SpicyMcHaggus: the best tzatziki sauce is the one you make at home. 6 magic ingredients... yogurt, cucumber, garlic, lemon, pepper, dill, done.

[milesdividendmd]

Reality is the S&P500 is down 0.37% today, the Euro unchanged!  This "crisis" has been really boring so far.

If you are far from FIRE you should be rooting for a dip to buy some stocks "on sale."

VWO is down under $40/share today for the first time in a few months.  That's sort of my threshold for putting play money into emerging markets, so today I went BIG and bought... one share.

Looks like your technical support level didn't hold.

Now you are out a stick of bazooka gum.

Happy?

[sol]

Looks like your technical support level didn't hold.

Now you are out a stick of bazooka gum.

Happy?

Yep, thrilled.  Bought another share today at 38.2.  If it drops again, I'll buy again tomorrow.

Though to be fair, I'll probably buy again tomorrow even if it starts going back up.  DCA FTW.

[Kaspian]

I have been wondering if I should buy my Canadian index instead of the short term bonds I was planning to buy.  The Cad is on a bigger sale now, but I'm still 7% lower than intended asset allocation for the ST bonds.  Dammit.

It is expected that Canada will go into recession soon, so I wouldn't be surprised if it goes down even more, therefore more stocks for sale :)

I live in Canada, and yeah I wouldn't.  They're keeping the books pretty well cooked so we don't hit "official" recession status.  They're also talking about lowering the prime lending rate again.  ...Which is just plain crazy talk at a time when the Americans are talking about raising theirs.  We can't leverage more consumer debt just to get our GDP numbers up via housing sales.  It's already a downward spiral and I'm afraid they'll get the same reaction as when you try to flush a toilet after you just flushed it two seconds ago. 

[fb132]

I have been wondering if I should buy my Canadian index instead of the short term bonds I was planning to buy.  The Cad is on a bigger sale now, but I'm still 7% lower than intended asset allocation for the ST bonds.  Dammit.

It is expected that Canada will go into recession soon, so I wouldn't be surprised if it goes down even more, therefore more stocks for sale :)

I live in Canada, and yeah I wouldn't.  They're keeping the books pretty well cooked so we don't hit "official" recession status.  They're also talking about lowering the prime lending rate again.  ...Which is just plain crazy talk at a time when the Americans are talking about raising theirs.  We can't leverage more consumer debt just to get our GDP numbers up via housing sales.  It's already a downward spiral and I'm afraid they'll get the same reaction as when you try to flush a toilet after you just flushed it two seconds ago.

Don't forget it is also election year, so Harper is probably hiding some facts that show that we are ending up there in order to not hurt his campaign.

[forummm]

Looks like your technical support level didn't hold.

Now you are out a stick of bazooka gum.

Happy?

Yep, thrilled.  Bought another share today at 38.2.  If it drops again, I'll buy again tomorrow.

Though to be fair, I'll probably buy again tomorrow even if it starts going back up.  DCA FTW.

Wow, down another 3.5% today. Thanks for the warning that you're going to buy another share. I'll put in the short sale order.

[sol]

Wow, down another 3.5% today. Thanks for the warning that you're going to buy another share. I'll put in the short sale order.

I'll still take that trade.  Today's purchase was already about 3% down so I "lost" another 27 cents after that.  If it keeps dropping at this rate, before the week is out it will be cheaper than at any time since the depths of 2009.

I still think it's a market overreaction, and the EM isn't actually in nearly as bad of shape as it was in 2009.  But if I'm proved wrong, I'll keep buying all the way down because I believe in the long term prospects of the developing world.

The Shanghai composite index is up 70% for the year and down 30% for the month.  It currently has the same reported P/E as the S&P500, except their economy is growing at 7% instead of 2%.

Chinese stocks are in freefall.  If I was more of a betting man I'd be buying this dip with high hopes.  As it is, I'll stick with my tiny forays into VWO, secure in the knowledge that it won't really matter either way.

[milesdividendmd]

To quote a famous economic philosopher....

Everyone has an opinion 'til they get punched in the mouth.

-Mike Tyson

Why deprive yourself of the the opportunity to get punched in the mouth?

Or..

Why even mention an opinion that you lack conviction in?

[sol]

Why even mention an opinion that you lack conviction in?

Because someone started a thread asking about it?

How about you miles, how are you responding to world economic news these days?  Grexit have you down?  Made any DM sector trades lately?

[milesdividendmd]

No response. Still 100% foreign equities in my tax sheltered accounts and getting hammered this week. I'll reassess at months end as I do every month.

(AKA I must have an opinion because I'm getting punched in the mouth.)

I was down 0.4 % overall for the year  going into this week!

I guess my point is that a bet you don't care about is no bet at all.

In any case I always enjoy reading your thoughts, even if sometimes they are not backed up by skin in the game.

[patrickza]

I was hoping to buy more stock than usual for the next few months as I'm getting that discount, but sadly prior commitments mean I can only do my usual $5k a month.

[CanuckExpat]

I was out of olive oil and was at Costco today.
I went with the one sourced from Greek Olives instead of Spanish Olives because it was a lot cheaper..

Maybe I should have held out longer?

[forummm]

Wow, down another 3.5% today. Thanks for the warning that you're going to buy another share. I'll put in the short sale order.

I'll still take that trade.  Today's purchase was already about 3% down so I "lost" another 27 cents after that.  If it keeps dropping at this rate, before the week is out it will be cheaper than at any time since the depths of 2009.

I still think it's a market overreaction, and the EM isn't actually in nearly as bad of shape as it was in 2009.  But if I'm proved wrong, I'll keep buying all the way down because I believe in the long term prospects of the developing world.

The Shanghai composite index is up 70% for the year and down 30% for the month.  It currently has the same reported P/E as the S&P500, except their economy is growing at 7% instead of 2%.

Chinese stocks are in freefall.  If I was more of a betting man I'd be buying this dip with high hopes.  As it is, I'll stick with my tiny forays into VWO, secure in the knowledge that it won't really matter either way.

In case it wasn't clear, I was just pretending as though you were jinxing the stock. Each time you bought some, it plummeted. Hence my short selling jest.

I am also long VEMAX, but not overweighted relative to market cap.

[hodedofome]

Seems China and Greece are fighting each other to see who can get more headlines the past few weeks.

[BBub]

Long term: no change. 

Short term: I'll invest roughly the same amount as any other month.  May add a little extra since stocks are cheaper, but nothing crazy.  Otherwise sticking to the same ole plan... just DCA over the next several years until FI.