Take the long term view on Greece
The proof of the pudding is in the eating. In spite of volatility, European risk assets have been one of the bright spots on the investment horizon this year. The Eurofirst 300 equity index is up about 15% in this period. The market, while nervous about Greece and possible contagion risks, recognises that this is not the Europe of 2012, 2013 or even 2014. The Europe of 2015 has relatively stable banks, a strengthening economy, a supportive central bank and even the green shoots of inflation.
Taking a long term view, we maintain our positive bias to global equities as they continue to be a good source of returns for investors. Valuations are around the long term averages. Momentum continues to be positive for now. Sentiment, while positive, is by no means euphoric. As such, the bulk of our assets remain in equities and we remain moderately risk-on. Nonetheless, over the year, we have been decreasing our exposure to risk across our equity and fixed income holdings. We are aware that markets can strike with lightening speed. We continue to follow the unfolding situation in Greece closely and stand ready to act if the conditions so require it.
Mouhammed Choukeir is CIO at Kleinwort Benson