Greece Frightening: What S&P/ASX 200 investors need to know

The S&P/ASX 200 (Index:^AXJO) (ASX:XJO) has been much calmer today, although investors continue to sell off big-name stocks such as National Australia Bank Ltd. (ASX:NAB), Westpac Banking Corp (ASX:WBC) and BHP Billiton Limited (ASX:BHP)

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The S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) has crashed more than 3% over the last five trading days in what has been one of its most severe sell-offs in recent memory as investors continue to fret about a potential Greece exit from the Eurozone.

The waters are a lot calmer on the market today despite a 2% and 2.4% pummelling for the Dow Jones and NASDAQ indices overnight respectively. However, the local benchmark index has still managed to slip 0.2% after falling below the 5400 point mark earlier in the session for the first time this year.

XJO2

Source: Google Finance

Indeed, investors remain on high alert as a result of the events currently unfolding in Europe, and many remain hesitant to wade into the market after heavy losses recently.

This has certainly been seen in the bank stocks, with all four of the majors slipping further into the red. National Australia Bank Ltd. (ASX: NAB) and Westpac Banking Corp (ASX: WBC) have been the hardest hit, falling 0.4% and 0.3% respectively, while Commonwealth Bank of Australia (ASX: CBA) and Australia and New Zealand Banking Group (ASX: ANZ) have declined by 0.2% each.

The market's pessimism has also spread to the resources sector after iron ore and oil prices both fell overnight. BHP Billiton Limited (ASX: BHP), which produces both resources, fell 0.9%, while Fortescue Metals Group Limited (ASX: FMG), Santos Ltd (ASX: STO) and Liquefied Natural Gas Ltd (ASX: LNG) fell 2.1%, 1.5% and 2.1% respectively.

Given that the losses have spread like wildfire over the last few days, very few investors have managed to remain unscathed.

The market's confidence is down and although today's trading conditions have been much calmer, many fear there could be more pain to come.

Indeed, there is no way of knowing exactly how severe this sell-off could be, nor is it clear just how long lasting the impact of a potential Grexit will be.

As difficult and terrifying as it may be, investors need to ensure they remain composed, and that they don't join the hordes of others running for the exits.

Motley Fool contributor Ryan Newman has no position in any stocks mentioned. You can follow Ryan on Twitter @ASXvalueinvest. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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