Fund managers and advisers were left reeling by Greece's resounding rejection of its bailout terms, but maintain that retail investors will not be hit even if Greece leaves the euro.
Managers, advisers and strategists have repeatedly argued that investors will not be hurt by the Greek debt crisis. But with Greece shouldering an enormous debt, will fund houses and private investors really escape unscathed?
Last week commentators said a Greek no vote in Sunday's referendum seemed unlikely and were preparing for a deal to be cut. This week they admitted to being shocked at Greece's firm refusal to accept the creditors' conditions and acknowledged that a Greek exit from the euro was increasingly likely.
Adam Chester, head of economic research and market strategy at Lloyds, said: "Greece has taken another big step towards the euro exit door. Pulling back from the brink may be too much to ask of Greece's exasperated creditors." And Stephanie Flanders, chief market strategist for Europe at JPMorgan Asset Management, said: "With this 'no' vote we have moved firmly on to the Grexit side of the decision tree, with a messy Greek exit now more likely than not."
Why are managers so calm?
Jason Hollands, managing director at Tilney Bestinvest, said: "Greece is a small economy within the eurozone and represents a tiny proportion of the stock markets, with most of the European funds we rate holding no direct exposure to Greece whatsoever." Fund managers also argue that markets have been given ample time to prepare for that event and have scaled back any risky exposure well in advance.
According to Morningstar, just 0.2 per cent of open-ended fixed-income funds sold in Europe own Greek debt - and although some equity funds have some Greek exposure, it tends to be very small.
Darius McDemott, managing director at Chelsea Financial Services, said: "I have been surprised at the strong evidence that the market doesn't care about Greece." Having dropped from 1.11 against the US dollar at Friday's close to an overnight low of 1.0970, the euro was trading back towards 1.11 on Monday lunchtime. Similarly, against the pound, the euro traded only a little lower, at 0.71."
Who holds the debt?
But whatever the outcome from here, the effects will be major and some say markets are merely waiting for the next stage in talks before any dramatic reaction. Although Greece might not be a major player in the European stock market, the size of its debts are enormous. The country owes €330bn. Germany is its biggest creditor, with the rest owed to the IMF, ECB and a host of foreign banks. The amount owned by the asset management industry is not known.
Ms Flanders said: "A Greek exit from the euro would be costly to Europe's taxpayers - and legally very messy to the extent that it is likely to involve heavy losses for the ECB. It would also have important long-term consequences for the euro system and the future risk premium on eurozone assets and also raise more immediate geopolitical concerns if Greek membership of Nato or the European Union was brought into question. These risks are incalculable, but they can hardly be ignored.
"However, we do not believe the crisis poses major immediate risks to peripheral economies, the European financial markets or the eurozone recovery, all of which are now much less exposed to and better equipped to deal with Greek contagion than they were in 2011 and 2012."
How would a euro exit work?
At the moment, Greeks are unable to print more than a small quantity of euros, meaning if the ECB refuses to continue helping the country and it runs out of money, Greece's banks will have to take the money from depositors or print its own money. As Greeks do not have their own currency, that could see them moving to a parallel currency.
The reintroduction of the drachma would mean rebasing all Greek financial assets, wage and price contracts, into drachmas from euros. If foreign investors owned more Greek assets this might be more of a concern. As it stands, the main outcome of that would be that any euros left in Greece would soar in value and the new parallel currency would plummet. In the long term that would make exports incredibly cheap, but in the medium term pricing and trading the currency would be very difficult and high risk for those dealing in it.
Are fund managers worried?
Currently the fund management industry seems most worried about what Greece means for global investor sentiment and some are even seeing the country's pain as a buying opportunity.
Mr Hollands said: "The latest phase in the Greek debt crisis will undoubtedly provoke further market volatility. When combined with the aggressive sell-off in Chinese equities (which fell 16 per cent last week alone, even after the People's Bank of China cut interest rates) and growing expectations of US rate rises, these risk combining into a more generalised swath of bearish sentiment that ricochets around the globe as institutional investors and traders move to take further 'risk off the table'."
Wouter Sturkenboom, senior investment strategist at Russell Investments, said: "Despite the 'no' vote we still think of Greece in terms of a buying opportunity, but we await stronger signals before adding to our portfolio."
Christian Gattiker, chief strategist and head of research at Julius Baer, said: "While the attempts to stabilise the market will take some time, we are confident that it will be achieved. The 'screaming buy' territory is approaching."
