For the second time in 12 years, Argentina has defaulted on the repayments due for its national debt, after holdout creditors refused a midnight deal demanding full repayment of the US$1.3 billion they are owed. This has triggered panic across global markets, with investors sensing that all is not well with the economic recovery in Argentina and Latin America.

Increasing concerns over growing economic volatility caused by rising geopolitical tensions in Europe and the conflict in Ukraine are escalating fears among investors the global economy will suffer. Or even worse, it could be plunged into a new financial crisis, derailing its recovery from Europe’s sovereign debt and global financial crisis.

This has sent markets tumbling with the S&P TSX Composite Index down a whopping 200 points or 1.6% at midday Thursday. U.S. indices have also tumbled with the benchmark S&P 500 Index also plunging 1.6% over the same period.

What does it mean for investors?

The recent panic selling triggered by these events underscores how important it is for investors to remain calm and focus on their investment goals and the long term. Despite the sensationalist headlines, many parts of the Canadian economy remain strong. The economy is growing better than expected in May 2014, and companies continue to report solid results.

A key industry benefiting from this volatility is Canada’s energy patch, which continues to profit from stronger industry-wide fundamentals, including higher crude prices caused by the conflicts in the Middle East. This has also seen the price differentials between Canadian light and heavy crude blends to West Texas Intermediate narrow by 3% and 12% respectively since the start of the year.

All of this bodes well for operators in the patch to continue generating solid earnings growth, with my picks being integrated major Husky Energy Inc. (TSX: HSE) and Crescent Point Energy Corp (TSX: CPG)(NYSE: CPG).

Husky saw Q2 2014 net earnings jump a healthy 7% compared to the equivalent quarter in 2013, on the back of cash flow spiking a healthy 3.4% and crude production up 8% for the same period. The company also has a wide range of geographically diversified projects under development in Canada, the North Sea, and Asia. These allow Husky to continue growing crude production while tapping refining markets outside of North America.

Light oil producer Crescent Point is well positioned to continue growing earnings on the back of these stronger fundamentals along with its recent accretive acquisitions of a range of light oil assets in Canada, set to boost crude production and reserves.

Growing volatility will see investors flee to safe-haven investments

Investors in precious metals, particularly gold and silver are also set to benefit, with both being perceived as safe-haven investments in times of market volatility and geopolitical instability. This makes the battered precious metals mining sector attractive for investors seeking a leveraged play on precious metal prices.

In this industry, I think two standout plays are Barrick Gold Corp. (TSX: ABX)(NYSE: ABX), despite its second-quarter 2014 net loss, and Pan American Silver Corp. (TSX: PAA)(NASDAQ: PAAS). Both are trading with attractive valuations with enterprise-values of 6 times and 9 times EBITDA respectively.

Furthermore, the key driver of Barrick’s loss was a US$514 million impairment charge against its Jabal Sayid copper project. Barrick operates with some of the lowest cost structures in its industry, which means it can remain profitable at precious metal prices their peers can’t.

We are living in uncertain times with a range of conflicts around the globe creating greater geopolitical and economic volatility. But like all events, they will pass and while the headline news may be alarming, the underlying fundamentals at this time remain solid, stressing the need for investors to keep a cool head and focus on the long term.