The European debt crisis has been tense for nearly one year now. A majority of market prognosticators and financial pundits are predicting a downright negative outcome, including Greece leaving the eurozone and a severe recession throughout Europe. A doomsday scenario is a possibility, but still an unlikely outcome. Regardless of the eventual outcome, below are five ways to look to profit from the situation.

SEE: Recession: What Does It Mean To Investors?

Invest in Europe
U.S. investors are unique in that roughly half of the sales from firms in the S&P 500 Index already stem from overseas. As such, simply being a domestic investor means significant international exposure. Individuals could use this strategy and let certain domestic firms do the heavy lifting for them in Europe. For instance, semiconductor giant Intel just acquired a large stake in chip equipment supplier ASML Holdings, which is based in the Netherlands. Drug retail giant Walgreens also recently announced its intent to acquire U.K. rival Alliance Boots in two steps over the next few years to boost its own growth prospects. More brave investors may want to invest in Greece, Spain or Ireland directly, but a safer bet may be to rely on other firms or professionals with specific expertise in Europe.

Take Advantage of a Cheaper Euro
The Euro currency has become much cheaper compared to the U.S. dollar because of the financial crisis. This makes it much more affordable to buy European goods. Italy and France have a number of high-fashion handbag, clothing and shoe firms that sell in global markets. The higher-end goods are usually priced the same throughout the globe. However, purchasing directly from Europe could make the shipping costs worth it.

Buy a House in Europe
Just like in the U.S., a housing bust has made residential real estate the most affordable it has been in many years. Hard hit markets include Spain, Greece and Ireland. It may take some more time and Spain is said to be in the early stages of its real estate decline, but low prices and historically-low mortgage rates could end up paying off big for investors with down payment funds and a long-term investment horizon.

SEE: How Interest Rates Affect The Housing Market

Go to School in Europe
Education costs in the U.S. continue to rise at a much higher rate than inflation. Private and prestigious universities can charge at least $50,000 per year for tuition, and public universities costs nearly as much for students that don't qualify as out-of-staters. The cost of heading overseas to attend a four-year university can be a much cheaper alternative. Coupled with depressed currencies in Europe, it may make sense to consider heading there for an education. Study abroad programs could also be worth it and make housing and food costs considerably lower than stateside.

Travel to Europe
A number of value-conscious consumers have decided that now is an ideal time to travel to Europe. Thrill-seeking travelers are even venturing into the Greek Isles while others are taking advantage of a recent cruise mishap off the coast of Italy with the mindset that the crash was a one-off event and cruise operators are paying extra close attention to safety to avoid a similar episode. Many European currencies are also falling against the U.S. dollar, which makes the cost of goods and services lower.

The Bottom Line
Europe will work itself out eventually. It may take a few years and there may be significant ups and downs in the coming months, but the situation will inevitably turn more positive. In the meantime, there are a number of ways for individuals and investors to look to profit from the doom and gloom.

SEE: 5 Affordable Travel Destinations For 2012

Related Articles
  1. Investing

    Latin America’s Economic Forecast

    After a ten-year run, the economies of Latin America are in a decline. For sustainable, long-term growth, the region needs structural reforms.
  2. Retirement

    What Does It Cost to Retire in Panama?

    Learn how much it costs to retire comfortably in Panama, and why it has become one of the most popular retirement destinations in the world.
  3. Retirement

    The 5 Best Retirement Communities in Dallas, Texas

    Discover why the Dallas/Fort Worth area of Texas is a popular retirement destination, and five of the best retirement communities in the area.
  4. Retirement

    5 Ways to Use Your Home to Retire

    Retirement is going to cost a lot, and for homeowners who face a shortfall, their home can be a source of income. From downsizing to renting, here's how.
  5. Investing

    10 Ways to Effectively Save for the Future

    Savings is as crucial as ever, as we deal with life changes and our needs for the future. Here are some essential steps to get started, now.
  6. Personal Finance

    Top Universities for Getting an MBA Abroad

    Going abroad for an MBA can add cachet when it comes time to get a job.
  7. Professionals

    3 Benefits of Working Longer (and Retiring Later)

    There are many reasons why folks in their 60s may want to keep working until at least age 70. Here are three.
  8. Retirement

    What Does It Cost to Retire in Costa Rica?

    Tally up the costs associated with taking your retirement in Costa Rica, and determine whether you have what it takes to live in paradise.
  9. Credit & Loans

    10 Ways Student Debt Can Destroy Your Life

    If you're getting a student loan, think critically about how you will manage your loan. Student debt could have a profound negative impact on your life.
  10. Retirement

    5 Best Cruise Lines for a Recent Retiree

    The best cruise lines plan everything for you – the food, the entertainment and the itinerary. But pick a line with a compatible program and people.
  1. Can I borrow from my annuity to put a down payment on a house?

    You can borrow from your annuity to put a down payment on a house, but be prepared to pay an assortment of fees and penalties. ... Read Full Answer >>
  2. What are the risks of annuities in a recession?

    Annuities come in several forms, the two most common being fixed annuities and variable annuities. During a recession, variable ... Read Full Answer >>
  3. Are continuing care retirement communities accredited?

    Continuing care retirement communities (CCRCs) can be accredited through the Commission on Accreditation of Rehabilitation ... Read Full Answer >>
  4. Student loans, federal and private: what's the difference?

    The cost of a college education now rivals many home prices, making student loans a huge debt that many young people face ... Read Full Answer >>
  5. Are spousal Social Security benefits retroactive?

    Spousal Social Security benefits are retroactive. These benefits are quite complicated, and anyone in this type of situation ... Read Full Answer >>
  6. How are Social Security benefits calculated for divorced spouse?

    The maximum Social Security retirement benefit payable to a divorced spouse is 50% of the amount that would be paid to the ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  2. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  3. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
  4. Zero-Sum Game

    A situation in which one person’s gain is equivalent to another’s loss, so that the net change in wealth or benefit is zero. ...
  5. Capitalization Rate

    The rate of return on a real estate investment property based on the income that the property is expected to generate.
  6. Gross Profit

    A company's total revenue (equivalent to total sales) minus the cost of goods sold. Gross profit is the profit a company ...
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!