THE STOCK market has enjoyed its best start to a year since 1987, while bonds are said to be on the way down.

These are puzzling times for investors, but does that mean now is a good moment to review what you are invested in?

The all-important US market has been on steroids so far in 2018, gaining 4.3 per cent in the first two weeks of the year and helping the UK market to reach new all-time highs too.

But can this situation continue?

According to Alistair Strang, chart software inventor and founder of Argyll-based Trends and Targets, if the US continues on its current “lunatic” track, London’s blue-chip FTSE 100 index could in due course reach an all-time high of 8,711.

Although it would be unlikely to stay at that level for long, Mr Strang said the index would have to fall some way before causing concern for investors.

“For the FTSE to justify concern, the index needs to slip below 7,580 - just to indicate the surge since the start of December is easing,” he said.

“This would theoretically open the doors for weakness to 7,450.

“As the markets continue to prove, there is no rule which says something going down must go up or, something going up must come down.”

Meanwhile, there has been a flurry of warnings from respected investors that bonds, which have been in a long bull market, are about to head into a bear one.

UK investors have been piling into bond funds, according to Investment Association figures. In November bond funds attracted over £2 billion of investment compared with £713 million into equity funds.

Laith Khalaf, a senior analyst at Hargreaves Lansdown, said: “After ten years of ultra-low interest rates, perhaps some cash investors have finally given up the ghost and traded up the risk spectrum in search of a higher income.”

However, Mr Khalaf warned: “Today, monetary policy looks like it is going to tighten very slowly, which suggests the bond bubble may deflate rather than burst. However that’s still going to make turning a profit on bond investment more challenging.”

Jason Hollands, managing director at Bestinvest, said another factor in the rush to bonds is investor nervousness over the stock market continually breaking new records.

He added: “Calling the top of a market is a mug’s game and while high valuations and low equity market volatility are a reason to temper outright bullishness, a case can be made for the stock market rally to roll for some time yet.

“The global economy is in reasonable shape, monetary policy is expected to remain accommodative in a historical context and President Trump’s tax cuts will likely spark increased share buybacks by US companies.

“The final phase of equity bull markets often sees exuberant buying by retail investors....we are not there yet, but it makes sense to be risk aware.”

In such a scenario investors could hedge their bets. Mixed or multi-asset funds are the second most popular UK investor choice, pulling in £1.2bn in November.

These are typically in-house funds offered by the new breed of platforms offering so-called robo advice – off-the-shelf investments picked for investors according to the results of a risk-profile questionnaire.

There are now over 20 robo options on the market, with Santander and HSBC poised to launch offerings later this year.

Holly Mackay at consumer website Boring Money said: “The market share of ready-made portfolios and funds is increasing as more robos launch and more platforms promote their in-house multi-asset funds or portfolios.

“This year I expect to see a far greater proportion of multi-asset sales, as platforms create in-house products and a turf war emerges to try and woo the armies of suspicious savers – newcomers to investments who have traditionally stuck to cash but are looking for alternatives as rates remain low.”

Maike Currie at fund house Fidelity International said accessing physical assets such as gold, agriculture and property via pooled funds could also help protect against “the wealth-eroding effects of inflation”.

“You can invest in gold via a fund which invests in the shares of gold mining companies, such as the Investec Global Gold Fund,” she said.