Investment - Articles - The tyranny of bad democracy

 Market Commentary by John Ventre, Portfolio Manager, Spectrum and multi asset funds, Skandia Investment Group

 The ancient Greek philosopher Plato once asked which is worse: a bad democracy or a country reigned by a tyrant. He concluded that tyranny was preferable - better for one person to commit many bad deeds than for the people themselves to be responsible for the destruction of their own society. This gives us an interesting lens through which to view current political events in Greece, because it seems that's exactly what's happening.

 In a time of national crisis, Greece needs to unite but its political system is completely fractured, with no party achieving more than 20% of the vote. Much has been said of the rise of SYRIZA, but this even calls itself a coalition of the radical left.

 Yet there is one thing that the Greek electorate is agreed on - in latest polling 78.1% want to stay in the Euro. This is an overwhelming majority - Greek politicians must put their differences aside and unite, otherwise the exact reverse is likely to be the result.

 It's my view that Greece doesn't matter per se - it's a sideshow. The risk is that 2012 is election year for Germany and the Netherlands needs a new government. If we continue to get indecisive results, like Hollande only scraping home against Sarkozy, then it could be a tough slog for European markets.

 European markets are trading at book value, so for me these risks look more than priced in and we are adding to our European equity positions in our equity and multi-asset portfolios. But I am doing it with my eyes open.