What has been noticeable this past year is the surge of optimism in stock markets, as the eurozone crisis has faded into the distance, and the economy — both globally and in the UK — has been recovering strongly.
This has led the FTSE 100 (FTSEINDICES: ^FTSE) to break out of its trading range, and push on beyond 6,000, reaching levels not previously encountered since before the global financial crisis.
Blue chips have surged ahead
A host of blue-chip shares have surged ahead. Companies which many had thought becalmed in the doldrums, such as Aviva and Vodafone, have pushed ahead. Financials such as Lloyds have seen their share prices increase substantially. And growth companies such as Supergroup have also forged ahead.
At last investors in the UK stock market have had something to smile about.
But as the summer sunshine has turned to autumn rain, so share prices have also been a little sodden. What’s more, as some troubles have receded, there have been new things to worry about.
There have been fears about a US debt default. There have been fears about a loss of momentum in emerging markets.
The FTSE is all set to push on upwards
But I remain an optimist. The US debt ceiling debate has turned into nothing more than an autumn squall in a tea cup. Emerging markets have clearly slowed down, and their stock markets have fallen but, particularly in China, there are positive signs of recovery.
Indeed, the global economy’s growth seems to be gathering momentum, driven by the twin engines of the US and China. Yet QE still seems a long way from being tapered.
So I feel all the ingredients are in place for the FTSE 100 to continue its climb upwards, perhaps testing the highs it reached earlier this year. That’s why I remain substantially invested in the stock market. There is always a chance of a future shock to the stock market, but I don’t think we’ve reached that point yet.