Contrarian opportunities
But if you're more of a high-roller than I am, he sees contrarian opportunities in the most unlikely places -- Greece, Italy and Spain.
The iShares MSCI SpainIndex (EWP) dipped below $20 on July 24, 2012, just before European Central Bank President Mario Draghi's"whatever it takes" statement; it has advanced almost 60% since then, while iShares MSCI Italy Index (EWI) has soared 50%.
"It's probably reasonable to assume that if the European crisis is over, Spain would be an opportunity," Vardy said.
In fact, the U.S. debt limit debate is probably a bigger political risk to markets than the eurozone is right now.
But the real surprise: Global X FTSE Greece 20 ETF (GREK), which has more than doubled since its lows last June.
Despite stagnant or negative growth -- both Spain and Greece suffer Depression-level unemployment of 25% -- these markets have taken off as bond yields plummeted: Spain's 10-year bond yields less than 5% and Italy's is just above 4%. That's way below Spain's 7.75% peak and Italy's 6.6% pinnacle last July.
And Greece's deal in November 2012 to buy back bonds from investors has lifted financial markets, although its people are still struggling.
All three "Club Med" countries have come a long way, so I'd wait for a pullback before committing new money. And quite frankly, they're so risky -- especially Greece -- that I might not have the stomach to invest in them. If you do, I wouldn't commit more than 1% of your investable money.
But if the eurozone crisis is really over and these economies are making a long, slow comeback, there could be big, big money to be made.
No guts, no glory, as they say.
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