SPACE, the final frontier.

When the late, great, Leonard Nimoy and friends first set out to trek across the stars, it was to be a five year mission to boldly go where no man has gone before, writes Jeffrey Ball, assistant director at Brewin Dolphin in Newcastle.

The FTSE 100 Index explored its own strange new world this month when it passed the 7,000 points mark for the first time, almost to the day following its own six year mission since the market bottomed out during the credit crunch at 3,512 points.

A six year bull market and 100 per cent increase sounds peachy on paper, but it has not all been plain sailing. After a twelve month lull, the market has seen a return to levels of volatility in the last six months more typically seen in those early years of the recovery, when sentiment viciously ebbed and flowed as perceived risks escalated and diminished. Undoubtedly risks still remain now but here we are, having finally reached unchartered territory. So is it, as Spock would say, highly illogical?

The big difference now to previous flirtations with this level is it has been a long time coming. We use the 2009 low as a touchstone as it is still topical, but the journey to 7,000 goes back much further, to 30th December 1999 in fact. Back then, everyone was either really excited about leaving the 20th century, panicking that Big Ben’s chimes on New Year’s Eve would herald the end of the world or, more realistically, it would mess up Windows 98 on your PC.

The FTSE 100 entered the year 2000 at 6,930 points but this new all-time high was the result of a sharp increase that dissipated as quickly as the midnight fireworks. Spock would definitely have found it most illogical.

The following years were testament that it had been too much too soon. The tech bubble burst and the market shuddered to a low of 3,287 by December 2003. Obviously 9/11 and the Iraq War played their parts, but simply looking at where the market was in 1999 compared to now, it looks like there has not been much progress made, but don’t forget the market actually got back up to 6,732 in the summer of 2007 before, well, you know the rest.

How then is it different this time? Well for the last 18 months or so, the FTSE has been ‘range-bound’ – oscillating against a glass ceiling of that 1999 high but never looking likely to breakthrough. Think Steve McQueen’s baseball routine in the Great Escape, simply bouncing back and forth with an increasingly bothersome thump.

When everyone returned from last year’s summer holidays, a congregation of fears over the fall in the oil price, Ebola worries, the Ukraine situation and other factors shook the market into life, causing a ‘correction’ of over ten per cent. But look back and corrections are normal, healthy even, and it served to remind everyone not to get too complacent.

There is no doubt we have at last seen the breach of a psychologically important glass ceiling and seeing how investors will act in this strange new world will be fascinating. Will they push on or pause and tentatively test the water? The early trading days after the new high have found investors hesitant and indecisive, a stance that may prove hard to budge. We are yet to determine if this stance will live long or if investors will prosper.

Jeffrey Ball is an Assistant Director at Brewin Dolphin in Newcastle.

The opinions expressed in this article are not necessarily the views held throughout Brewin Dolphin Ltd. No Director, representative or employee of Brewin Dolphin Ltd accepts liability for any direct or consequential loss arising from the use of this document or its contents. Any tax allowances or thresholds mentioned are based on personal circumstances and current legislation which is subject to change.