- Equity markets will remain volatile until the European sovereign debt crisis is resolved. This may take several years.
- Despite added volatility and investment risks, there will be periods when the broader markets will rally on optimism. This will provide astute investment managers ample entry points into the market that could translate into significant investment gains over time. For a precedent, think back to February and March 2009 - few were comfortable with the market volatility, but those that invested have benefited from a 120% run-up in the S&P 500 index.
- Assuming that Greece and the rest of Europe cannot come to a mutual agreement and Greece begins talks about an exit, it will take time. Accordingly, we do not believe that there is a significant risk of a disorderly default or exit. Rather, we believe all parties will work together to orchestrate a slow, mechanical, orderly exit, because everybody realizes that a disorderly exit could be disastrous.
- If and when the exit occurs, the world will be awash in liquidity. That's because central banks around the world, including the Federal Reserve, will engage in massive quantitative easing, to try to stimulate economic activity in their respective regions.
Greek Tragedy Calls for Gold, Silver
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