Where's the port in this euro storm?

The bookies don't often get it wrong and, according to Ladbrokes, Greece leaving the euro is now odds on.

Referendum or no referendum, political instability writ large in Athens and the big powers of Europe running out of patience perhaps signal the end of Greece's membership. If Greece were the only country to be sliding to the euro exit door, then the crisis would not be all that bad. But in addition we have Portugal, Ireland – which despite undergoing an economic recovery is still in the eurozone emergency ward – Spain and the biggest worry of the lot, Italy.

No wonder doomsday scenarios abound, but what are you as the private investor meant to make of all this? What protection can you put in place, and what potential is there to make a sound investment?

It would be a brave investor who looked at the screens of red numbers on the European indices last week and saw it as a buy signal. "The successive schemes hyped as a solution to this crisis seem to be falling down at an ever quicker pace and this is reflected in the market moves of this week," said Tom Stevenson, investment director of Fidelity.

For Greece, it might not be the beginning of the end of the crisis but the end of the beginning. "When we had what seems like a deal fleshed out a week ago the markets surged about 6 per cent, but have lost more than that since as it has unravelled quite spectacularly," said Adrian Lowcock from Bestinvest. "The truth is we don't know where this will end it could be blow up in a big way in which case markets will take a hit."

But where there is bad news and uncertainty there may be opportunity. "If you're the ultimate contrarian investor, then maybe Europe is the place to go over the next five years," said Darius McDermott, managing director of Chelsea Financial Services. "It's like the old investor maxim of investing on the sound of gunfire, that when everyone else is heading for the exit then it's usually time to pick up some bargains."

Just going by the numbers there are a lots of cheap company shares out there. "We aren't quite at all-time lows for price to earnings ratios (the price of a share relative to a companies earnings) but we are not far off. Good companies are trading at a nice low price which may be seen as a bargain in the years to come," said Mr Stevenson.

Mr McDermott adds that the last time there were similarly low price to earnings in Europe in 1982 this was followed by three successive years of above 20 per cent annual share price growth. And company dividends are high as well. "The Ignis Argonaut European income fund run by Oliver Russ is seeing annual dividends of 6.2 per cent; elsewhere above 5 per cent is commonplace," Mr Lowcock said.

Any dividend income north of 5 per cent is not to be sniffed at in an environment where cash savings accounts on average are returning less than 1 per cent. "Don't just look at the price of a particular stock but its dividend: long term much of the growth on an investment come from the dividend the company pays," Mr Stevenson said.

However, according to Mr McDermott, despite the tempting numbers there are compelling reasons to stay well clear of Europe, even relatively prosperous and economically sound Germany. "Continental share markets are cheaper than both the UK and US but they are cheaper for a very good reason. We don't know where this is going to end and, on balance, I'm quite bearish," he said.

But, if investors must have a slice of the European action, the advice of the experts is to choose their manager carefully and to drip feed cash rather than invest large lump sums. As for managers Mr McDermott favours Blackrock's Continental Europe fund and Neptune's European opportunities. Mr Lowcock is also a fan of Neptune's fund and Ignis Argonaut's European income offering.

Even fund managers whose job it is to be invested in European companies are treading very carefully. "Some valuations of companies are cheap but that isn't the be all and end all," said Ian Ormiston from fund management group Ignis. "I am concerned that a lot of the profit forecasts for next year in eurozone companies haven't properly been taken account of the impact on confidence of the crisis. Many European indices still have weighting towards the banks which are obviously going to be in the frontline of the crisis. At present I am looking at companies which trade well globally. Take VW, for instance. It may be a German company but it has realistic growth plans for the Chinese and US markets."

But the smart play for investors may be to use the crisis in the eurozone to reassess where they have their money. "The old idea that you should have the overwhelming majority of your money in the UK and Europe is changing. People are rightly looking further afield at the emerging and so-called frontier markets (smaller economies which are growing fast) for returns," said Mr Stevenson. But for those whom an investment in emerging markets is a little too harum scarum they could look over the Atlantic. "In developed economies if I was looking at the US against the eurozone I would look at America first. The numbers there are much better and the corporate sector is quite profitable," Mr Stevenson said.