Thank You, Greece

Tyler Linsten Investing


Markets reacted poorly to news out of Greece today. The country’s financial struggle has essentially been a practical joke for five years. Thankfully, the details don’t really matter to your portfolio.

Just like the details don’t matter when conflict in the Middle East flares up, as it perpetually does. Just like they don’t matter when other small countries get into trouble and the dreaded “d” word comes into play (default). Just like they don’t matter when a new disease shows promise of ravaging the entire world (but never does).

Show me a globe and a blindfold and wherever I lay a finger on land will reveal a country whose drama has roiled markets at one point in history. Today, it’s Greece. Next year it’ll be somewhere else.

The only thing that matters is perspective. If your portfolio’s value declined today then it’s important to thank Greece and the investors who panicked because they are serving as a reminder that patience and tolerating risk will forever be rewarded. The practice of giving no incentive to acting on impulse is the basis for the entire financial system – it creates the risk premium, in finance-speak – and by embracing this effect you will ensure yourself an advantage over everyone who acts on emotion.

Risk is rewarded. Patience is rewarded. Impulse is not.

Markets were down about two percent today and it’s something that will happen every so often through the course of any given year. If you lost “a lot” of money today then I suggest you thank Greece – the country’s drama show has served a reminder that you started today with a lot of money and you have ended the day, still, with a lot of money. It’s never bad to be reminded of a good thing.

Keep ignoring the headlines and keep your eyes on the target, soon enough you’ll be thanking yourself (maybe from a Greek island you purchased on Craigslist for twenty bucks).