Happy days are here again for equity investors. That's the message from a growing number of folk in the investment business, and they are putting their money where their mouths are. The year got off to a flying start in January with the FTSE All-World Index Series - which tracks equities - touching its highest level since June 2008. Despite a blip last week the resilience is likely to continue.
The big investment theme of 2012 - government bonds - has lost its lustre because of frustration with low yields and suspicion over high levels of currency manipulation by some of the biggest bond issuers.
As for my pet hate, gold and gold fanatics (who no doubt will write another round of e-mails urging this column's demise for not supporting their fanaticism), well, what can I say? The plain fact is that despite the famous economic uncertainty that is supposed to be good for gold prices, it is in the doldrums.
This is not to rule out the chance to buy gold in the future, but as an investment theme it doesn't pass muster.
The strength of equities, however, is underpinned by increasing merger and acquisition activity, the kind that takes place when publicly listed assets seem to abound at bargain prices. This was the view of Warren Buffett with his recent US$28 billion bid for the food group HJ Heinz. Comcast has recently joined a clutch of dealmakers in the media sector by buying General Electric's stake in NBC Universal.
So, what is it about equities right now? There is optimism over the end of the recession as key economies, notably the US and Germany, not only move into economic growth but, and this is where market psychology kicks in, do so at a faster rate than had previously been expected. Markets move on expectations, not facts.
Even in Japan, where the Nikkei 225 has long been regarded as the ugly sister of the big stock indices, optimism is rising, and long bets are being taken on the renewal of Japanese corporate strength. With aggressive government backing, Japanese companies are back, armed with a more competitive currency, and credit lines that facilitate growth.