Weekly Market Recap Greece has dominated the attention of financial markets this week. The Greeks will vote a referendum this Sunday to decide on their appetite for further austerity measures. However, it's important to remember that Greece has defaulted at least five times in the past, and Greece is small both in terms of its economic output and stock market. Hence if Greece does default it will not be unprecedented and the long-term impact is likely to be small. In fact, Greek GDP has declined an astonishing 25% under recent austerity measures and the Greek unemployment rate is the highest in the EU, so though it will likely entail short-term disruption, a Greek default could potentially even improve the nation's growth prospects relative to recent history. Defaults are not unusual, if that proves to be the outcome for Greece. Last year Argentina defaulted on its debt and the impact on global markets was minor. Equally last year, both Russia's invasion of Crimea and the Ebola crisis were causes for significant concern at the time, but ultimately a limited impact on global markets last year, which have made all time highs after these events. Our research shows that investors who react to short term news headlines often lose out on future returns. At FutureAdvisor we recommend portfolios that are constructed to help manage the ups and downs of the global markets and always with a long term view in mind. For example, on Monday when the markets were weak we saw fixed income positions within the portfolio rise in value as expected, and international diversification was also valuable. In this case Japan and the Yen performed relatively well in the face of broader market declines. Contrary to our stable approach, making short-term moves in your portfolio can hurt longer term returns due to the opportunity cost of being out of the market and the direct costs of trading. If you'd like to try our Premium service, we're currently offering 6 months free for you to enjoy the benefits of our allocation, automatic rebalancing and tax efficient processes, but this offer ends at midnight Pacific Time this Sunday (July 5). Disclaimer:
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