Whether you’re an avid day trader or your portfolio is on set-it-and-forget-it, we have some news from the market frontlines.
The days of thinking and behaving like a U.S. investor are over. Done. Sayonara. Auf wiedersehen. Why?
Three words: sovereign debt crisis.
You remember how the U.S. government’s debt was downgraded last week, signaling to those who buy our bonds that maybe the U.S. isn’t a sure bet. Something similar, but worse, is underway in the European Union.
Basically, to condense a complicated situation, the sovereign debt crisis means that European countries have issued so much debt (in the form of government bonds) that they may not be able to pay it all back.
If Italy, say, can’t pay its debts to France, and France can’t pay its debts to us…and so on…you’re looking at a house of cards that could swiftly collapse.
Was this supposed to make you feel better? No—smarter. As investors, that’s what we will all need in this new world order.
Look abroad. Have you been following the crisis in Europe?