Protecting Your Portfolio from the Euro Zone Crisis: Experts
With the euro sinking to a four-year low against the dollar in volatile trade on Monday, is it time for investors to abandon their European investments?
Jim Moffett, portfolio manager at 5-star rated Scout International Fund, and John Merrill, founder and chief investment officer of Tanglewood Wealth Management, shared their insights.
(See their individual picks and pans below.)
Moffett said there is still good opportunity in Europe, but warned it's a stock-pickers' environment. His fund is focusing on export-oriented companies or those with underlying growth, while avoiding financials.
"There's good opportunity there on a longer-term basis," he said. "Short-term it's a little choppy."
Merrill said his firm is underweight large financial companies such as Citigroup and Bank of America , and is carefully watching US companies that do a large amount of their business in Europe.
He added that investors should consider gold as an additional means of protection.
"If you look back at the last three years of this crisis...it's been one progression of debt from the industry, to the banks, to the sovereigns and ultimately to the safest of sovereigns," he said. "This crisis in Europe really is just putting more weakness in that final safety net."
What They Said Last Time:
- Merrill's Latest Appearance on CNBC (April 21, 2010)
- Moffett's Latest Appearance on CNBC (November 19, 2008)
More Market Insight:
- One Market Relationship Is My 'Biggest Concern': Art Hogan
- Why Dow 5,000 Is Still 'Very Likely': Strategist
CNBC Data Pages:
Merrill doesn't own any of the stocks he mentioned. Moffett owns shares of Ahold, Siemens and Luxottica through his fund, but not personally.