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Is the Greece Crisis Finally Over?

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  • (1:00) - Is Greece Making A Comeback?
  • (5:10) - Greece's Problematic Economy
  • (7:50)  - Privatization in Greece
  • (10:30) - Greeks Leaving The Country To Find Work
  • (15:20) - Tax Avoidance and ATM Restrictions
  • (18:00) - How To Invest In Greece:
  • (25:00) - Episode Roundup:

Welcome to Episode #99 of the Zacks Market Edge Podcast.

Every week, host and Zacks stock strategist, Tracey Ryniec, will be joined by guests to discuss the hottest investing topics in stocks, bonds and ETFs and how it impacts your life.

In this episode, Tracey is joined by Zacks Harry Kougias, who spent 4 months in Greece this year and is a Greek expat. For the third time on the podcast, he shares his observations about the Greek economy.

There are signs that Greece may be turning it around economically.

The Good Signs for Greece

In July 2017, Greece held its first successful bond sale in 3 years, raising 3 billion euros.

2017 is also expected to be Greece’s best for tourism ever. Over 30 million visitors are expected this year, up from 27.5 million 2016. Some islands are seeing so many tourists they’ve had to put a cap on visitors.

Popular Santorini received over 600 cruise boats in 2016. On some days, nearly 20,000 cruise ship passengers would disembark, overwhelming the small island. In response, Santorini joins other popular vacation destinations like Venice and Barcelona, in restricting the number of tourists who can enter each day.

Tourism is 24% of Greece’s GDP. 8 in 10 new jobs were created through the tourist sector.

But even with that success, it has been an uneven recovery. Not every island is Santorini. And because tourism is so seasonal, with many places shutting down in the winter months, it’s very difficult to make a living at it.

The Bad Signs for Greece

Even with tourism soaring, unemployment remains the highest in the Eurozone at 23%. For young people between the ages of 18 and 24, it is much worse. Some put the number as high as 50%.

The result has been a brain drain with many young people opting to move to other parts of the EU to start their careers. It means that Greece is losing the very people who it needs to spark the economy in the coming years.

Additionally, pensions continue to be cut, putting further strains on Greece’s seniors.

How to Invest in Greece’s Comeback

But for every pessimist, there’s an optimist wondering how they can invest in Greece’s comeback.

With tourism being one of the largest industries, the most obvious investments are found there.

1.      The Greece ETF (GREK - Free Report) is the easiest way to invest IN Greece. Shares are up 22% year-to-date as some investors have already bought into the turnaround story. But be careful, as the ETF carries a lot of the banks and shipping companies in its top 10 holdings.

2.      Ryanair Holdings (RYAAY - Free Report) is one of the low cost European airlines that offers a lot of flights to the Greek Islands. It’s a way to play the tourism trade.

3.      Royal Caribbean (RCL - Free Report) is cashing in on the popularity of cruises worldwide, but the Mediterranean is certainly high on many lists. And as the Eurozone economy improves, more consumers will want to travel.

4.      Expedia (EXPE - Free Report) is an online travel agency but it also owns HomeAway, the popular home rental company. Greeks have figured out that renting their homes to vacationers is a good way to earn some extra cash.

5.      Priceline is one of the largest vacation booking companies in the world. It’s off its highs and trading with a forward P/E of 24.

Is Harry optimistic this year, or pessimistic, about the Greek economy and turnaround?

Tune into this week’s podcast to find out.

Want to Listen to Last Year’s Greece Podcast to See if Harry and Tracey Got It Right?

Listen below to find out more from the November 2016 podcast on Greece.

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