Investing Knowledge

World stock markets are on a tear. You won't read about it in the mainstream press, as they prefer to focus on doom and gloom.

So today we're fighting back

THE FTSE 100 INDEX SOARS 11% HIGHER IN JUST 10 DAYS

Step right up folks and enjoy the market rally of a lifetime.

In fact, as of Friday last week, the FTSE 100 index had risen for an incredible 10 days in a row. The last time it did this was in 2003. If Monday is an up day, it will break the world record for consecutive up days in a row. Move (NASDAQ: MOVE - news) over Mark Cavendish and Michael Phelps.

Making A Small Fortune

People who have been skilful enough to buy shares in these FTSE 100 companies just 10 days ago and held them through to today, will be patting themselves on the back with unbridled vigour

• Kazakhmys (LSE: KAZ.L - news) (LSE: KAZ) -- Up 36%
• Fresnillo (LSE: FRES.L - news) (LSE: FRES) -- Up 29%
• Eurasian Natural Resources (LSE: ENRC) -- Up 29%
• Legal & General (LSE: LGEN.L - news) (LSE: LGEN) -- Up 32%

These share price movements, in these FTSE 100 companies, highlight once again just how unprecedented these times are for stock market investors.

Outdoing those large gains, take a look at the 10-day performance of these smaller companies

• International Personal Finance (LSE: IPF) -- Up 84%
• JJB Sports (LSE: JJB.L - news) (LSE: JJB) -- Up 53%
• Cookson (LSE: CKSN) -- Up 45%

In 20 years' time, when we recount the story of the Global Financial Crisis (GFC) to our children or our grandchildren, they simply won't believe the share price movements listed above were possible in such a short space of time.

They'll also say "Presumably, Dad, you backed up the lorry and bought a whole stack of these cheap bombed-out companies when they were trading at such dirt cheap prices?"

If Only...

Sadly that wasn't the case for me, and I suspect for most other investors too. But at least I wasn't selling any more shares, having jettisoned my entire holding in Barclays (LSE: BARC.L - news) (LSE: BARC) at around 300p.

But I didn't buy shares in any of the companies listed above. And I certainly didn't back up the lorry, preferring to keep some of my investments in cash.

It just goes to show the market can act in strange and unpredictable ways. Investors who bought shares in those companies just 10 days ago could hardly have believed just how far and how quickly the shares have appreciated.

The Worst Of The Recession May Be Behind Us

So, where next for this soaring stock market? Small fortunes have been made by the brave and lucky souls who bought companies like the seven listed above right before they took off.

The contrarians amongst you will say that just because I've highlighted how much the markets have risen is itself a signal that a correction is imminent.

Maybe.

There are plenty of reasons to remain pessimistic about the UK economy, and therefore the stock market. Rising unemployment, government's huge budget deficit, the plunging pound, compounded by Friday's dire gross domestic product numbers, which saw the economy contract by 5.6% per cent in the year to June.

But there are also reasons to be optimistic. According to FT.com, Warren Buffett advised investors on Friday to stick with equities because the strong results in a range of bellwether companies and big banks had made stocks, in his words, the place to be.  

Fight Back Against The Doomsayers

Whatever happens in the future, now is a time to acknowledge and appreciate just how far the market has moved up in such a short space of time.

It's a time to fight back against the doomster headlines of the popular press, who in their dash to sell newspapers, routinely highlight stories of disaster whilst ignoring the positives.

Optimism alone will not turn this economy around. But it certainly helps.

If your share portfolio has risen nicely over the past 10 days, give yourself a pat on the back for staying invested through the dark times. Give yourself an extra pat if you bought shares a couple of weeks ago whilst many others were sitting on the sidelines.

May the investing force continue to be with you. Happy investing!

More on the economy and the markets:

• 3 Really Bad Reasons Not To Sell
• The Google Panic Indicator
• Don't Buy Into These 3 Investment Myths

> If you are feeling optimistic, and want to find out the names of some great companies trading at cheap prices, why not give the Motley Fool's Champion Shares premium stock picking service a free 30-day try? Visit www.fool.co.uk for more details.

> Bruce Jackson, sadly, does not have an interest in any of the companies mentioned in this article.