Happy New Year, and welcome back to the land of opportunity.

In my experience there are two ways of returning to work in the New Year; some return, complaining that the break is over so soon, already missing their lie-in, mince pies and hours of Halo 3 on the X-box. Others hit the office, raring to go, with new targets to hit and bags of enthusiasm.

I admit that I’ve always been in the latter group; as a fund manager a new year meant new profit targets and league tables to get stuck into.

But now, as then, too much enthusiasm can be counter-productive. The rush to get on the first trade of the year, to get in ahead of the sleepy crowd who are still scratching their arses and swapping Christmas anecdotes; the desire to benefit from market levels that are only there because of a year-end squeeze is commendable but risky.

Firstly, a lot of the serious players, the fund managers looking after the mega-bucks, tend to be distracted by year-end reports, meetings, meetings to arrange meetings and meetings to decide what to do this year, leaving little time to play in the markets at the start.

Secondly, that leaves the traders (you and me, and the big boys that don’t need to bother with reports so long as they make a lot of money), who hit their desks just having read a forest worth or predictions for the New Year:
“Sterling’s going to crash”
“US heads for recession”
“Slowdown in Europe”
“Attractive opportunities in oversold shares”
You get the picture.

So there’s a barmy army of traders, fingers hovering over the buy/sell button, debating whether to back the Sunday Times, Telegraph, Goldman Sachs or the Sun (if it mentions ‘tits’ or ‘sex’ buy it).

Two examples this morning were the FTSE and GBPUSD. When I powered up my screens at just gone 7 o’clock I was greeted with an early price in FTSE of 6410. This seemed a plausible correction given that the market had rallied around 250 points over the Christmas period, and the US markets sold off after Europe closed on New Year’s Eve. But bang on 8 o’clock the FTSE shot up to challenge 6500, and it’s remained close to that all morning.

The reaction in Sterling wasn’t quite as dramatic, but the early trade showed GBPUSD at $1.9880 (down from a Christmas high of $2.0104). The rate then continued to fall, spiking down to $1.9787 at 8 o’clock, before recovering to around $1.9850 for much of the morning.

Both of those could have left me with a really crap start to the year. Luckily, drawing on my experience of previous years, I decided to have a cup of coffee and watch the action unfold. I’m dead keen to get in there and get the pound signs rolling, but I’m hanging back, keeping my capital safe until I see a worthwhile trade.

The old favourites, gold and oil, could be worth a punt as traders target $850 and $100 respectively, but mindful of my track record in gold I’m willing to cheer it on from the touchline.

Happy Trading