Personal Finance: Brian Tora column

I FEEL spoilt for choice this week. Should I reflect on the launch of the new European currency or the return of "irrational exuberance" to stockmarkets? Perhaps I had better deal with both.

The stockmarket generally rises in the first weeks of the new year. Heaven knows why. In December, a buoyant market is put down to the "Santa Claus" effect, which, in reality, is fund managers carrying out housekeeping before the year end.

January is meant to be more considered, but markets tend to rise on average, as fund managers position themselves for the year ahead. The surge this week was attributed to US managers cutting back the cash piles built up during trickier times.

Did I hear someone mention horses, stable doors and bolts? It feels that way. What is more, technology stocks are again sucking in cash. The price/earnings multiple on the Dow is now close to 40, and no thinking fund manager with a sense of history can put their hand on their heart and say this does not leave the market highly vulnerable. If it goes on like this, when the correction comes, it will be swift and dramatic.

At least the euro got off to a cracking start. There must be a few who wonder why the Square Mile put in so much effort, given that we elected to stay on the sidelines. The reality is that the euro is as much a threat as an opportunity. London dominates foreign exchange trading, and could suffer declining volumes as a result of fewer transactions in the base European currencies that will be subsumed into the euro.

Make no mistake, the euro will make a difference. It will aid the competitive edge of European companies. More important, it will level the playing field forexamining the differences between shares in the same industry.

There is an argument for investing in Europe on the basis that it is behind the US and UK in the economic cycle. A stronger argument, in my view, is that there will be some catching up to be done if the euro is seen to work, and European companies start to be rated against their US counterparts. The demand for European shares - and for European funds - could be strong.

This pre-supposes that the single currency works, which is not guaranteed. We did not stay out just to be bloody minded, and it is too easy to be lulled by the euphoria of a successful launch into believing that all the ducks will swim neatly into a row. Europe is not a single economic entity yet, and taxation, cultural and bureaucratic differences may yet throw strains upon the system.

However, there is much money and prestige riding upon the successful delivery of EMU. If it does all go according to plan, then we will not be talking about Europe as a part of the geographic asset diversification of a portfolio. As Europeans living in Europe, we will be investing in European shares, perhaps buying European theme funds to gain exposure to particular industries. Investors who want to be ahead of the game should think about starting now.

Brian Tora is chairman of the Greig Middleton investment strategy committee

Voices
voicesGood for Lana Del Rey for helping kill that myth, writes Grace Dent
Sport
The Pipes and Drums of The Scottish Regiments perform during the Opening Ceremony for the Glasgow 2014 Commonwealth Games at Celtic Park on July 23, 2014 in Glasgow, Scotland.
Commonwealth GamesThe actor encouraged the one billion viewers of the event to donate to the children's charity
Sport
Karen Dunbar performs
Entertainers showcase local wit, talent and irrepressible spirit
Sport
Members of the Scotland deleagtion walk past during the opening ceremony of the 2014 Commonwealth Games at Celtic Park in Glasgow on July 23, 2014.
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
Life and Style
ebookA wonderful selection of salads, starters and mains featuring venison, grouse and other game
Arts and Entertainment
The Tour de France peloton rides over a bridge on the Grinton Moor, Yorkshire, earlier this month
film
Life and Style
fashion Designs are part of feminist art project by a British student
News
Very tasty: Vladimir Putin dining alone, perhaps sensibly
news
Life and Style
Listen here: Apple EarPods offer an alternative
techAre custom, 3D printed earbuds the solution?
Arts and Entertainment
Top guns: Cole advised the makers of Second World War film Fury, starring Brad Pitt
filmLt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a uniform
News
The University of California study monitored the reaction of 36 dogs
sciencePets' range of emotions revealed
News
Snoop Dogg pictured at The Hollywood Reporter Nominees' Night in February, 2013
people... says Snoop Dogg
Arts and Entertainment
A scene from Shakespeare in Love at the Noel Coward Theatre
theatreReview: Shakespeare in Love has moments of sheer stage poetry mixed with effervescent fun
News
Joining forces: young British men feature in an Isis video in which they urge Islamists in the West to join them in Iraq and Syria
newsWill the young Britons fighting in Syria be allowed to return home and resume their lives?
Arts and Entertainment
The nomination of 'The Wake' by Paul Kingsnorth has caused a stir
books
News
i100
Life and Style
food + drinkZebra meat is exotic and lean - but does it taste good?
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs General

    BI Manager - £50,000

    £49000 - £55000 per annum + competitive: Progressive Recruitment: My client is...

    BI Project Manager - £48,000 - £54,000 - Midlands

    £48000 - £54000 per annum + Benefits package: Progressive Recruitment: My clie...

    VB.Net Developer

    £35000 - £45000 per annum + competitive: Progressive Recruitment: If you're pa...

    SAP Business Consultant (SD, MM and FICO), £55,000, Wakefield

    £45000 - £55000 per annum + competitive: Progressive Recruitment: SAP Business...

    Day In a Page

    Screwing your way to the top? Good for Lana Del Rey for helping kill that myth

    Screwing your way to the top?

    Good for Lana Del Rey for helping kill that myth, says Grace Dent
    Will the young Britons fighting in Syria be allowed to return home and resume their lives?

    Will Britons fighting in Syria be able to resume their lives?

    Tony Blair's Terrorism Act 2006 has made it an offence to take part in military action abroad with a "political, ideological, religious or racial motive"
    Beyoncé poses as Rosie the Riveter, the wartime poster girl who became a feminist pin-up

    Beyoncé poses as Rosie the Riveter

    The wartime poster girl became the ultimate American symbol of female empowerment
    The quest to find the perfect pair of earphones: Are custom, 3D printed earbuds the solution?

    The quest to find the perfect pair of earphones

    Earphones don't fit properly, offer mediocre audio quality and can even be painful. So the quest to design the perfect pair is music to Seth Stevenson's ears
    US Army's shooting star: Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform

    Meet the US Army's shooting star

    Lt-Col Steven Cole is the man Hollywood calls when it wants to borrow a tank or check a military uniform
    Climate change threatens to make the antarctic fur seal extinct

    Take a good look while you can

    How climate change could wipe out this seal
    Should emergency hospital weddings be made easier for the terminally ill?

    Farewell, my lovely

    Should emergency hospital weddings be made easier?
    Man Booker Prize 2014 longlist: Crowdfunded novel nominated for first time

    Crowdfunded novel nominated for Booker Prize

    Paul Kingsnorth's 'The Wake' is in contention for the prestigious award
    Vladimir Putin employs a full-time food taster to ensure his meals aren't poisoned

    Vladimir Putin employs a full-time food taster

    John Walsh salutes those brave souls who have, throughout history, put their knives on the line
    Tour de France effect brings Hollywood blockbusters to Yorkshire

    Tour de France effect brings Hollywood blockbusters to Yorkshire

    A $25m thriller starring Sam Worthington to be made in God's Own Country
    Will The Minerva Project - the first 'elite' American university to be launched in a century - change the face of higher learning?

    Will The Minerva Project change the face of higher learning?

    The university has no lecture halls, no debating societies, no sports teams and no fraternities. Instead, the 33 students who have made the cut at Minerva, will travel the world and change the face of higher learning
    The 10 best pedicure products

    Feet treat: 10 best pedicure products

    Bags packed and all prepped for holidays, but feet in a state? Get them flip-flop-ready with our pick of the items for a DIY treatment
    Commonwealth Games 2014: Great Scots! Planes and pipers welcome in Glasgow's Games

    Commonwealth Games 2014

    Great Scots! Planes and pipers welcome in Glasgow's Games
    Jack Pitt-Brooke: Manchester City and Patrick Vieira make the right stand on racism

    Jack Pitt-Brooke

    Manchester City and Patrick Vieira make the right stand on racism
    How Terry Newton tragedy made iron men seek help to tackle their psychological demons

    How Newton tragedy made iron men seek help to tackle their psychological demons

    Over a hundred rugby league players have contacted clinic to deal with mental challenges of game