Financial advisers tell clients to shrug off the Greek vote

Any market pullback is seen as a buying opportunity

Jul 6, 2015 @ 11:13 am

By Jeff Benjamin

Financial advisers and investors are keeping a calm head Monday by keeping Greece in perspective.

As Greek voters went to the polls on Sunday, ultimately voting against the latest austerity measures presented by the European Union to help guide Greece out of it financial straits, there doesn't appear to be any happy outcomes for the Mediterranean country.

But even as Sunday's vote was expected to rattle the global equity markets, some financial advisers are barely taking notice of what happens in a country with an economy about a third the size of New York state.

“We have tried to educate our clients not to overreact to events and use them as opportunities to exploit them for their benefit,” said David Demming, president of Demming Financial Services Corp.

The general calm among his client base was illustrated through a morning email from a client inquiring about using any Greece-related market pullback as an opportunity to convert a traditional IRA to a Roth.

“You like to do things like that when things are depressed, and we like pessimism because it creates opportunities,” Mr. Demming said. “Our clients are not spooked by the short-term events, because they know there's a good possibility that the world will not come to an end.”


As the vote tallies started rolling on Sunday, there were warnings about a global market meltdown, but as of midday Monday, the U.S. equity markets saw only a modest pullback. After dropping 166 points off the opening bell, the Dow Jones Industrial Average was off about 48 points, or 0.27%, at 17,682.04. The S&P 500 slipped three points, or 0.15%, to 2,073.57 while the Nasdaq composite was down even less, losing just two points, or 0.03%, to 5,007.47.

It isn't that markets ignored the significance of what could be the first developed market to default on its debt, but the reality is that Greece is becoming an old story.

“This has been with us since 2010, and we've been explaining the Greece scenario to our clients all along,” said Bryan Beatty, partner at Eagan Berger & Weiner.

“If you're sitting in cash and you've been looking for an opportunity to get in to the markets, there might be a reason to take notice,” he added. “But this is really a political issue and the bigger question is what it means for the rest of the eurozone.”

One potential scenario Mr. Beatty sees is that Greece will somehow navigate its way out from under its debt and ultimately away from the euro, and that could become a blueprint for debt-laden countries such as Portugal, Italy and Spain.

“It's a dangerous scenario for the European Union,” he added. “We're avoiding the entire European southern region.”

Tim Holsworth, president of AHP Financial Services, described Greece as “more of an irritation for the markets, but not a fundamental problem.”

“Even if it creates some volatility,” he added, “we don't trade actively enough to change our long-term portfolios.”

The Monday buying opportunity that didn't initially present itself is still a lingering possibility, according to Nigel Green, founder and chief executive of deVere Group.

“There will be extensive negotiations taking place right now behind the scenes between Athens and its creditors,” he said. “This chaos will mean that investors will be braced for more turbulence and there could be a stock market selloff over the coming days as investors seek perceived safe havens.”


What do you think?

View comments

Upcoming event

Nov 13


Top Advisory Firm Summit

Formerly known as the Best Practices Workshop, this new one-day conference will also include content from the Best Places to Work event!The Top Advisory Firm Summit will provide CEOs, COOs, CTOs, CMOs, and Managing Partners from the... Learn more

Most watched


Schwab's Jeff Kleintop: Prep for volatility given China trade uncertainties

China could be considered a developed market in five to seven years , according to Jeff Kleintop, chief global investment strategist, Charles Schwab.


Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

Funding for Reg BI, other SEC advice reform efforts denied in Waters amendment

House likely to approve measure that effectively kills rule package, but it faces uphill battle in Senate

Wall Street lashes out at Sanders' plan to pay off student debt with a securities trading tax

Financial pros argue that a transaction levy will hurt mom-and-pop investors along with investment houses.

GPB paid B-Ds and reps steep commissions to sell troubled private placements

GPB paid commissions of 9.3%, or $167 million altogether, on the firm's private placements.

Give us a break, active managers say

Seven portfolio managers share their outlooks for the rest of the year, generally agreeing that it's been hard for active managers to stand out.

GPB Capital reports decline in value of two biggest funds

One has dropped by 25.4% and the other by 39%, according to the company.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting It'll help us continue to serve you.

Yes, show me how to whitelist

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print