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Best month for Europe stocks since 2011; where now?

Major concerns over the falling price of oil and Greek parliamentary elections haven't been enough to rub the shine off European equities, which currently stand at 7-year highs.

At the end of the last trading day in January, the Euro Stoxx 600 benchmark closed up 7.2 percent on the year.

In Germany, the 9.1 percentage gain for the DAX in January easily outpaced the S&P 500, which has lost around 2.2 percent this month.

Market watchers like Michael Hewson, chief market analyst at brokerage CMC Markets, aren't getting carried away, however. He told CNBC via email that there are concerns in the market about the state of Greece's finances.

"This may cause increasing volatility in the coming weeks, but unless we get another black swan event we could well see further gradual gains in broader European markets in the coming weeks and months," he said. A "black swan event" is a large and unpredictable issue that roils global asset markets.

Despite some major volatility in global markets, the main driver for Europe in January was the launch of an open-ended monthly bond-buying program by the European Central Bank (ECB). The bank plans to purchase 60 billion euro ($70 billion) worth of private and public debt each month until at least September 2016.

This could amount to as much as a trillion euros swishing around the euro zone economy, and means the ECB has joined the U.S. Federal Reserve, Bank of England and Bank of Japan in launching a quantitative easing (QE) scheme.

Kerry Craig and Alex Dryden, two global market strategists at JPMorgan, said there is an expectation that ECB asset purchases will continue to drive European markets higher, and that investors might be better off treating the market with caution.

"While QE provides a much-needed confidence boost in the near term, we would advise against simply applying the U.S. experience to European equity markets," they said in a note on Friday.

"Instead, investors should continue to focus on fundamentals and on the ability of companies to deliver earnings growth in the year ahead."