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With Greece close to submitting its final deal, can you afford not to read this article?
Greece is at a cross roads, as is the EU. So many choices and yet none will fully benefit either party.
Greece is on its knees and has very little options to regain any functioning cash flow, if Greece was a business it would be in administration. Greece needs to be relieved of some of its debt, but the EU is not doing very well either at the moment and neither is most of Europe. Writing off billions of euros is not something to be taken without full consideration. The fact is, Greece must en-devour to prove that this measure will be enough to restore a level of stability within its economy and banking system. TAX increases and abolishing TAX loopholes namely the Islands 30% discount on VAT (which creditors are pushing for) would be a good start but a real plan of action with clear timelines and substantial measures will be needed to stabilize the situation.
If Greece can successfully bring together a plan and the EU and its creditors accepts these measures as adequate and substantial enough then overall markets should see less down side. If Greece have not produced a good enough plan and the situation is not resolved (in other words, if Greece don’t receive any debt relief) then the markets of the EU countries will suffer.
The fact is, Greece is relatively small, the uncertainty in the market is being somewhat over played and that is the real danger for investors.
Even among all this market uncertainty there is a silver lining for investors.
Oil is on the way back up but most oil companies are still not recovering. I fully expect oil to continue its recovery and companies will start to recover when the market sees a permanent change and prices become more stable.
So which companies are safest in these uncertain times?
(LSE:UKOG) (LSE:HUR) (LSE:SXX) these three are UK based companies and have strong support from the UK government. UKOG and HUR are oil companies and will continue to benefit from oil prices increasing and the tax reduction kindly given by the UK government. SXX has the support of locals in their area of operation and have an asset which will change the UK economy for the better.
There are other companies on AIM which have strong fundamentals but I feel these three should especially be noted.
Another company (LSE:HNT) has something rather special to offer prospective investors, HNT operate within the EU and the middle east and have survived the last recessions and came out the other end much stronger, THEY EVEN PAY DIVIDENDS!
To conclude, the Greece problem is going to lose investors a lot of money if not resolved.
If you wish to continue investing you must consider the markets that will be most insulated and the companies that will thrive regardless of the outcome. Furthermore, taking profit and de-risking more often will enable you to build your portfolio without continued exposure to market turmoil.
Finally, always stick to your plan. If your research suggests that a company is growing and has strong fundamentals then there is no reason to sell until you are in profit. Research is key and unless you wish to gamble then research is your most important tool. Don’t sell unless you are sure something has seriously changed to detour your choice of investment away from the path of growth.
I hope this has helped and as always.
All in my opinion and not to be taken as fact nor advice.
Always seek professional advice before investing in any company.
