How quickly fear subsides. Not so long ago the eurozone crisis was dominating global headlines, Greece was going under and Spain and Italy were going, too.
The US, rent asunder by a failing political system, was all but broke. Only an ailing Chinese economy offered some succour.
Unless you happened to be the lucky recipient of a few billion dollars from a central bank, state-owned capitalism in the East was the only hope for private capital in the West. Such was the prevailing view of the global economy mid-last year. Debt, it was thought, would be our downfall.
Then the European Central Bank addressed the problem of debt by printing more of it. The money markets were flooded with liquidity that happily found a home in Spanish and Italian bonds.
A deal was done with holders of Greek debt and the very public insanity of the US political system was replaced by the US primaries circus. The relief came slowly, but come it did.
On September 23, 2011, the All Ords Accumulation Index was trading at 3979. On Wednesday, April 4, 2012, it closed at 4419, a rise of 11 per cent.
Had you invested during the panic last August, you would have done even better. So, let's all pat ourselves on the back, put our feet up and enjoy the rally.
Er, not so fast.
Let's start with global debt. There's something intrinsically problematic about issuing more debt to solve a debt problem.
If debt was the source of the troubles, how can it also be the solution?
Around the world, governments are using debt to grow our way out of recession. Hayekians, on the other hand, argue we must shrink our way out of it.
Historically, Keynesians have the edge in this argument, but it's hardly a conclusive victory. Debt remains a major issue. It is not a problem that has gone away.
Nor have concerns regarding the slowing of Chinese growth. In fact, since the publication last December of our special report, "The coming China crash", the issues it highlighted have gone mainstream.
As Adrian Mowat, the chief Asia and emerging-market strategist at JPMorgan Chase & Co, says: "If you look at the Chinese data, you should stop debating about a hard landing ... China is in a hard landing. Car sales are down, cement production is down, steel production is down, construction stocks are down. It's not a debate any more, it's a fact."
The Chinese, hardly known for their statistical honesty, have even lowered their own growth forecasts.
This presents investors with a testing conundrum: share prices are up, optimism is returning and yet the very things that were the source of anxiety five months ago have, if anything, got worse. What to do?
Here are six immunity-boosting responses to the prevailing optimism:
Accept that your portfolio is different now than it was eight months ago. There are probably stocks in your portfolio that have risen markedly. Adjustments are almost certainly required as a result. Remember that the best portfolio today is almost certainly different to the one of eight - or even three - months ago
Exercise the psychology of self-restraint. There's no need to become frustrated and start buying overvalued or fairly valued stocks just because everyone else is. The last thing you want is to lose money because you joined the herd or your cash holdings burned a hole in your pocket.
Increase your cash holdings. Use the rally to lock in some profits and trim your holdings of stocks that have performed strongly.
Watch portfolio limits. Consider reducing your holdings in those stocks where recent price rises have meant your original portfolio limits have been breached.
Sell down cyclical, low-quality businesses. If your portfolio is still a home to low-quality businesses such as AGL, Incitec Pivot, Fortescue and Rio, now's a good time to get rid of them and set the cash aside for opportunities to buy better-quality businesses in future.
Examine current pockets of value. Whereas many of the stocks on our buy list in the middle of last year were either strong or outright buys, most of the current 21 stocks are long-term buys. That's purely a function of rising prices but don't let that deter you. Paying up for quality, even in these times, is no bad strategy.
Nathan Bell is the research director at Intelligent Investor, intelligentinvestor.com.au. This article contains general investment advice only (under AFSL 282288).