Investor confidence has re-emerged

Now the conflict in Iraq has ended and oil and house prices have started dropping, UK investors appear to have rediscovered their optimism. The market is carrying an air of confidence that has been absent for a long time. At the moment, investors seem happy to take on smaller, riskier names in return for potentially greater rewards. Meanwhile, defensive stocks ' for so long the staple diet of the bear market ' are lagging behind. The breadth of the latest rally has seen small and medium-sized companies' valuations rising healthily along with their larger counterparts. But is this buoy...