With the eurozone facing the greatest crisis in its history, should investors stay away or try and cash in?
It seems not a day goes by without the perilous situation in the eurozone taking another twist. The ongoing debt crisis dominates both the mainstream and financial news agendas.
While the election of a Greek coalition government seems to have saved the embattled Mediterranean state from imminent euro extinction, the focus of attention has now shifted to Spain and Italy.
Nobody quite knows how the eurozone situation will play out – making it a difficult investment call. So we ask some investment experts how they are playing the eurozone.
How are you playing the eurozone crisis?
Skerritt Consultants head of investment Andy Merricks said the ongoing sovereign debt crisis makes European equities a risky proposition. “We are out of equities, it’s just too chancy really,” he said.
“We have been out for over a year now since the whole Greek situation kicked off last April. The only real exposure we have to equities is through a pan-European pharmaceutical ETF. I am happy to hold this because it is defensive and pays dividends.”
Skerritt Consultants favours high yield bond instead, upping its exposure to the asset class last October. “We did that because we thought the eurozone crisis is more of a sovereign debt issue than a corporate debt issue,” added Merricks.
“Some companies are actually doing quite well. Default is everything in the corporate bond world so if you avoid default you will keep on picking up the coupon.”
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