While the world is watching the drama over Greece unfold on a day-to-day basis, many investors are wondering how much market risk is involved in the Greece situation and what ways, if any, can investors profit from the turmoil.
In a new report, Morgan Stanley analyst Graham Secker answers both of these questions for concerned investors.
Timing Is Everything
According to Graham, the ultimate market effects from the Greece situation will vary depending on timeframe. In the short-term, the uncertainty surrounding Greece and fear of contagion, especially within global financial sectors, will likely continue to produce stock market weakness. However, Graham believes that these fears are generally overblown.
“We believe a lack of significant contagion, a proactive EU policy response and the reduced risk of a muddle-through scenario for Greece going forward should allow equities to make solid gains over the medium-term,” Graham explained.
The long-term effects that the Greece situation will have on global financial markets remains unclear at this time.
Contagion Is Key
Greece itself accounts for…
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