NEW YORK (TheStreet) -- A Greece-inspired haze of uncertainty has been cast over the global markets, putting a damper on the "risk-on" mentality that defined October.As we move ahead to the end of the year, investors must be wary of the political turmoil threatening this corner of the EU. Near-term market action and investor mood will likely shift from headline to headline. Greece's Prime Minister, George Papandreou, has been the center of attention this week over his reportedly aborted attempt to call for a referendum on the EU's rescue plans for the nation. As global leaders, market commentators, and investors have noted, the referendum would have carried a great deal of weight. Aside from determining the next step in the ongoing Greek bailout saga, it would have had decided Greece's future as a member in the eurozone. In the days that followed the initial announcement, the plan faced ample criticism. In statements made Thursday morning, Greece's finance minister, Evangelos Venizelos expressed his disapproval of the referendum and urged Papandreou to stick to the original plan devised by the EU in late October. Most recently, news sources are reporting that the proposed referendum has been scrapped. Still, questions surrounding the EU will likely linger in the near term and Greece will remain in the spotlight its government prepares for Friday's confidence vote, and global leaders convene in France to take part in the G20 conference. For investors, this sort of uncertainty has created a choppy environment. Effectively navigating the road ahead will require patience and flexibility. As evidenced by the October flow data compiled by the National Stock Exchange, investor appetite for risk returned last month. Emerging market ETFs, domestic equity funds, and high-yield bond ETFs like the iShares iBoxx $ High Yield Corporate Bond Fund ( HYG) were among the biggest inflow recipients. Improving market conditions were not enough to entice investors to shed safe haven asset classes entirely, however. The iShares Barclays 20+ Year Treasury Bond Fund ( TLT) and the PowerShares DB U.S. Dollar Index Bullish Fund ( UUP) ended the month with net inflows as well. Meanwhile, sentiment towards Europe was mixed. While products like the Vanguard MSCI Europe ETF ( VGK), iShares MSCI Germany Index Fund ( EWG) welcomed investor funds, others products proved less alluring. The iShares MSCI EMU Index Fund ( EZU) and the iShares MSCI Italy Index Fund ( EWI) ended the month with net outflows.
As we look ahead, it may be tempting to target Europe-linked ETFs in order to track the ongoing saga taking place in this corner of the developed world. However, I do not recommend such a strategy since it is difficult to forecast what is in store for this region,. Given the dramatic political climate currently facing the EU, I feel that this region is appropriate for only the most risk-tolerant short term traders. Conservative investors would be better off watching from the sidelines. Those desperate for international exposure should turn their attention to the emerging markets. As we have seen over the past few months, these nations are better, more stable options. Written by Don Dion in Williamstown, Mass.