‘Turmoil in Europe masks bright spots’
Investors who are overly pre-occupied by economic turmoil in Europe may miss opportunities elsewhere. As we expected, the biggest game in town for economists this year has been predicting how the huge government stimulus spending of 2008/09 would unwind. So it’s no surprise that what began as a debt crisis in Greece, has caused investors to ask questions not just about Europe, but the UK and US too. Shares have fallen (see chart) with European markets hit hardest. A ‘flight to safety’ has seen investors ditch the Aussie dollar and turn to high-quality bonds – vital for effective diversification and a core part of diversified portfolios.
