How To Trade Moody's Greek Debt Rating Cut (VGK, EPV, NBG, CCH)

Moody's Investors Service announced on Monday that it lowered Greece's debt rating three levels from Ba1 down to B1; a move that comes among increasing concerns over sovereign debt problems faced by many Euro-zone countries. Moody's cited the Greek government's tax collection difficulties and implementation risks to the country's structural reforms. Greece was forced to make certain reforms last year when it received a 110 billion euro bailout from the European Union and the International Monetary Fund. Although the bailout prevented Greece from defaulting on its national debt, the measures that the Greek government had to accept in order to receive the bailout were widely unpopular and led to deadly riots. The painful steps that Greece made included spending cuts and tax increases that were needed in order to lower its budget deficit. The rating cut could lead to increased fears that Greece and other European countries such as Italy, Spain and Portugal may face further fiscal difficulties. Investors who think that Greece and Europe will get past these problems should take a look at the Vanguard MSCI European ETF VGK. The ETF seeks to track the performance of a benchmark index that measures the investment return of stocks issued by companies located in the major markets of Europe. Investors who believe that the lowering of Greece's credit rating may be a sign of (or could lead to) trouble in other European economies may want to consider the ProShares UltraShort MSCI Europe ETF EPV, which seeks daily investment results, before fees and expenses, that correspond to twice the inverse of the daily performance of the MSCI Europe Index. The following are Greek companies that will be directly affected by any major changes in Greece's economy: National Bank of Greece SA NBG is a diversified financial services company that operates primarily in Greece. Coca-Cola Hellenic Bottling Company S.A. CCH operates as a bottler and vendor of The Coca-Cola Company's KO products in Europe and internationally.