A survey of US investors last month showed that more than 60 per cent expected shares to be higher in a year’s time than they are now. A new paper by Charles Dumas at TS Lombard explains why. His argument is that there are three big drivers that make the upside more likely than the down. First there is the synchronised recovery noted above. Second, while most commentators are warning about a fall, investors have buying power – and had they listened to the warnings they would have lost out on a 25 per cent rise in share prices over the past two years. Third, the underlying inflation rate in the US, Europe and Japan is still very low. So the central bank commitment to pushing inflation up to 2 per cent will keep them pumping out the money that will fuel the boom.