(Dow Jones) In recent years, financial advisors have strongly encouraged clients to think globally when it comes to their investments. But the debt crisis in Southern Europe threatens to put a sudden halt to such a diversified strategy.

Advisors are of mixed opinions as to what to tell clients. On the one hand, they recognize there's now real concern among investors of the potential for foreign failure. They also recognize that, because of the global economy, what happens in Europe can be felt all the way to Asia. Consider: If the European economy struggles, it's likely that Europeans will have less money to purchase goods and services from such emerging markets as India and China.

Pran Tiku, president of Peak Financial, an advisory firm in Waltham, Mass., says the bottom line is that the European debt crisis "will force investors to become much more cautious everywhere" in the short term.

On the other hand, advisors say investors may see what's spreading in Greece, Spain and Portugal as a more contained affair and not necessarily a cause for global panic, especially given the moves already in place to stabilize Europe's economy. Just look at how the Dow Jones Industrial Average, after last week's European-stoked 213-point loss, rebounded the next day with a 53-point gain. The market continued that trend Thursday, closing up 122.

Plus, after the mortgage-fueled U.S. collapse of 2008, investors are getting more sophisticated-as loaded a term as that may be these days-in distinguishing the nature and severity of different calamities, say advisors.

"People have the ability to divine whether it's a mini-crisis or a major catastrophe," says Cassandra Toroian, president of Bell Rock Capital, an advisory firm in Rehoboth Beach, Del., and author of the soon-to-be-released "Don't Buy the Bull" (Sterling & Ross).

But even Toroian adds a couple of caveats: First, she's not sitting on a London trading desk, where the concern is much more real. And second, she's not convinced investors are fully in the clear. "Ask me again in three to six months," she says.

Either way, advisors are fielding calls from concerned clients, who worry that any tremor in the global economy could upend their investments. They also are beginning to understand the vulnerability of foreign economies, especially if they take a historical view.

"They remember the defaults in South America and the currency crisis in Asia," says Jeff Duncan of Duncan Financial Management in Sunset Hills, Mo.

But if their investments are concentrated in the U.S., those same clients may be feeling rather confident. Indeed, a good number of advisors are no longer advocating as aggressive a global strategy. Also, several got their clients out of any European investments months ago in anticipation of the current crisis.

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