euro crisis to date -- a war that's far from over given this week's latest anxiety about Greece, the unresolved issue of a sovereign Spanish bailout and signs of sharp German economic slowdown.
Long-term investors typically had four main options:
1) Avoid the euro zone altogether -- nigh-on impossible for massive euro-based pension and mutual funds if not the biggest global funds
2) Seek safety internally within the bloc's perceived safest havens, such as German debt.
3) Take a medium-term view of the outcome that allows you to you pick up short-term pricing anomalies and wait for overwhelming policy response.
4) Tactically play the ups and downs.
This year at least, those who even could have avoided the euro zone completely may have had lower blood pressure and a decent year on Wall Street or in emerging markets
so far but they would also have missed some very big euro moves indeed.
Total returns on are up more than 60 percent in Portugal's 10-year government debt, more than 30 percent in Irish equivalents, 23 percent in Italian benchmark bonds, and even up 2 percent for the asset in eye of the current euro storm -- Spanish 10-year paper.
Given the euro is basically little changed against the dollar since January, these would not have needed currency hedges for most overseas funds either.
Investors who stuck to a medium conviction the euro would survive intact, and that policymakers would eventually do all necessary to support it, would have had a relatively good year to date despite all the apocalyptic commentary.
As for the internal safety trade, once again, the anxiety conscious may have been happier with less than 7 percent returns on 10-year German bunds, but that has been less than a third of the 20-percent-plus returns on German equities.
For trend-playing tactical traders? Well, if hedge funds specialising in macro trading strategies like this are any sort of proxy for that, then that was possibly the big one to avoid.
Hedge funds, who typically charge the largest fees, have had another miserable year with average returns of just 4.3 percent -- according to Hedge Fund Research Ė but average macro strategies are actually down 1.3 percent year-to-date.
So what are the lessons for those looking at weeks of fiscal cliff angst stateside? Playing the panics and second-guessing daily trends doesn't appear very fruitful in this environment.
Avoiding U.S. assets altogether is much less of an option, not