Posted by Jean
You’ll have to pardon the pun in the headline of today’s newsletter, but I couldn’t resist. On Sunday, Greece had its highly anticipated parliamentary elections. I say “highly anticipated” because for the past several weeks we’ve been told that these elections would have important and significant consequences on our own financial markets. In fact, late last week, I even saw some predictions that said individual portfolios could gain or lose as much as 5% of their value depending on the outcome of the election. Investors have been anxious, to say the least.
Given that the dealings within the Eurozone can be slightly complicated, let’s take a look at what went on, step by step:
Who won the Greek election? The New Democracy party — also known as the pro-bailout party — won 29.5% of the vote, which translates to 161 seats in Greece’s 300-seat parliament.
On a macro level, what does this mean? To quote part of an article from the New York Times: These results “averted, at least for the time being, the doomsday prospect that had investors on edge in recentweeks: a sudden and messy exit of Greece from the Euro.” The opposing party, the leftist Syriza party, wanted to return to the drachma, the Greek currency used before the Euro. As the quote from theTimes suggests, a Greek exit from the Euro would have had dangerous implications for Europe’s economy — and in turn, dangerous implications for our own economy.
Now what? At first, the world markets showed relief: the value of the Euro rebounded slightly on Sunday night, and early morning Monday trading in Asia showed that stocks were up across the board. However, these gains were gone by the middle of the day on Monday, indicating that concerns about Spain’s borrowing costs had taken hold amongst investors. The results of the Greek election are a step in the right direction, but Europe won’t be out of the woods until issues with Spain and Italy (which is also going through a banking crisis) are solved.
What does this mean for me? Stay the course on your own investing strategy. Try not to let the headlines get to you, and don’t make any irrational decisions with your money based on one election result or one bad day of European market activity.
The above hyperlinks are to two great New York Times articles; I highly recommend reading them if you’d like to learn about the Greek elections in greater detail. And now, here are the other headlines for the week:
Kids struggle to find summer work in cities
The job market isn’t just affecting adults these days; teenagers, too, are having trouble finding jobs this summer. Reuters reports that as of April, the average unemployment rate for 16-to-19 year olds was 24.9% and skews even higher in major metropolitan areas. Part of this is because teens are often the last hired and first fired, and they have to compete against adults who have been forced into low-paying positions due to the recession. The other reason teens are having trouble finding work is that federal stimulus money that created summer programs for teens is no longer available this summer.
It’s a bleak picture, to be sure, but if your child is struggling to find a job and you’d like to help them, take a look at this article I wrote on the subject last summer. One thing that can help is networking. Help yourchild make a list of all your friends, family members and acquaintances who work someplace that could use a part-time assistant or intern.
Don’t blow your budget during your vacation
It’s easy to let yourself go during a vacation: you have more time to sleep, more time to eat, more time to drink. And while I’m all for forgetting about a diet if it means a week of relaxation, what I don’t want you to do is blow your budget while you’re away. This CBS News article has several great tips for keepingyour wits about you when it comes to your summer spending. Among them: pack the right credit cards (some cover insurance on car rentals, for example), make a daily budget before you leave and check daily deal sites like Groupon and Living Social. You could find discounts on group outings and save bundles.
Have a great week!