Martin "Marty" Leclerc

The victory of the New Democracy party was anticipated by the big stock market rises in Athens on Thursday and Friday. Key points:

The New Democracy Party is in power but nothing of note has changed. Greece remains corrupt, over-indebted, and uncompetitive. There’s little prospect out of its de facto bankruptcy unless the people of Greece demand and receive real reforms. That is unlikely to happen in the intermediate term.

Notwithstanding promises to essentially renegotiate the memorandum of understanding reached earlier this year with the so-called “troika:” the IMF, the EU and the ECB, the fate of Greece will eventually be decided in Northern Europe.

It boils down to a question: will the Euro-zone become more like a proper fiscal union? There are hopeful signs such as the European Stability Mechanism and the Summit later this month.

But big challenges remain for Europe:

Rich countries need to create a mechanism to deal with Euro-zone imbalances without taxpayers thinking they’re idiots for subsidizing the profligates.

The electorate in Core Countries must buy into the idea that the “whole” is greater than the sum of its parts. That they are all Europeans traveling in the same boat.

What this means for investors:

We believe the odds favor more of the same: politicians continuing to muddle-through this process of defining what it means to be in Euro-land.

Global Stock Markets will remain volatile because these problems require political solutions and this creates uncertainty that investors loathe.

The investment climate remains fearful.

Where to put your money:

Fear and uncertainty is the friend of long-term investors because it lets you buy low. Many great European companies are now selling at valuations not seen since the lows of March 2009.

Interview the prospective advisor as if he or she is applying for a job. Ask about their experience and their philosophy. Ask them to describe how they'll work with you. Ask about how they charge for their services and ask if there's anything differentiated about how they approach investing. Ask for references.

Look at their website and their published materials. Then it's up to you to decide if this person is credible, open and professional; and well suited to your personality. In short, someone whom you feel comfortable with and who you believe will place your interests first.

Standard deviation describes price movement volatility and it's one measure of risk. We don't find the concept particularly helpful in thinking about risk, however, because volatility and risk are not the same.

Volatility is the price you pay for liquidity. It creates both buying and selling opportunities, but does not alter a fundamental reality: Over time, companies become more valuable if they manage their cash flow effectively.

At Barrack Yard Advisors, we think of risk as the probability of a permanent loss of client's money.