EDITORIAL: Greece, China and your wallet

Kalispell, Montana, is 5,945 miles from Athens, Greece. That distance may seem to cushion you from the turbulent fiscal crisis under way in the cradle of European civilization.

But don’t be fooled.

What happens in Greece will affect what happens in the rest of Europe, and what happens in Europe will affect what happens in North America.

The decision of Greek voters to reject an economic rescue plan has left the entire world wondering what is next. Will Greece exit from participation in the euro? If it does, what will that mean for Portugal, France, Ireland and other debtor nations in the European Union. If multiple nations decide it make sense to default on their own loan obligations, who winds up holding the bag?

The answers to those questions, unfortunately, are completely unknown.

What makes the situation even worse is that Greece is by no means the only threat to the world economy right now. China’s stock markets are in the midst of a massive retrenchment — one that has investors jittery.

And while few American companies or investors directly participate in the Chinese stock market, the ramifications of a sharp decline in what is essentially the world’s largest economy could result in big problems for various mutual funds, retirement accounts and individual U.S. companies.

It’s been said many times in many ways that we are now a global economy, and while the system has worked well for quite some time, it cannot offer any guarantees for the long term.

Whether it is Greece, China, or some as yet undetermined province of the world market, you can bet that trouble is ahead sooner or later. When it comes, your best defense will be to stay informed, invest in a diverse portfolio, and be prepared to ride it out. We can’t advise you how to do that, but your investment counselor can.

It might not be a bad time to be paying close attention to your investments, wherever they may be.