Global indices have posted double-digit returns across the board over the past 12 months, with the S&P 500, Dow Jones and Nikkei 225 all posting multi-year highs.
Performance of indices over 1yr
Source: FE Analytics
Many industry experts believe that the rally is based on false pretences and that a significant correction could be around the corner; however, Dampier (pictured) thinks this is likely to be a long way off.
"I just think it’s going to grind higher and higher," he said. "There’s just so much momentum behind it now.""People who have missed out on it are thinking 'right, I want a piece of that'. More and more money is going in to the market, and driving it further and further."
"I can see the FTSE 100 hitting 7,000. Obviously it’s not going to last forever, but bar an unforeseen event like an earthquake or something, I don’t see it stopping any time soon."
Looking further in to the future, Dampier thinks a change in fiscal policy is the biggest potential stumbling block facing investors.
"We’re seeing slowly improving fundamentals everywhere you look. I think the biggest risk is when the economies improve significantly. When the Americans raise [interest] rates, then you could get a problem."
Dampier says the past five years have been "the most difficult time to invest" in his whole career, and that quality managers should not be suddenly dismissed just because they have had a bad time during it.
"Bill Gross, one of the best bond managers in the world, said that gilts were resting on a bed of nitroglycerin back in 2010 and look what they’ve done since."
Performance of sectors since 2010
Source: FE Analytics
"William Littlewood [manager of Artemis Strategic Assets] has shorted government bonds, and again look what’s happened there. Even the very best managers can blow up time and again."
"It’s been the most difficult cycle to be involved in that I’ve seen. I think this is why passive funds have made such an impression – you alleviate the manager risk," he added.
Hugh Yarrow (pictured), who heads up the five crown-rated Evenlode Income fund, believes that quality dividend-paying equities remain the best place to be invested, even though they have led the recent rally. He thinks markets have scope to rise over the medium-term, even though there are a number of macro concerns.
"The upward pressure on the market has definitely come from the search for yield," he explained. "When you’re getting a yield of 3 to 4 per cent with prospects of dividend growth, and cash is yielding nothing, there’s obviously going to be demand."
"At the moment it’s the best house in a bad neighbourhood. In the last couple of quarters we’ve seen quite a lot of weakness in economic numbers. There are signs that there’s going to be a global slowdown."
"In a normal cycle, that would result in falling markets, but because there is such a demand for yielding assets, the market has gone up."
Yarrow thinks concerns over the lack of value in equity income is somewhat overstated, but admits that there have been better entry points in recent years.
"Relative valuations are outstanding, and absolute valuations aren’t great, but fine," he said.
"The free cash-flow yield after all maintenance and Capex [on the FTSE All Share] is 7 per cent, which is pretty attractive."
"I don’t think the valuations we hold are worryingly expensive compared with their history."
"Ten years ago Smith & Nephew was trading on [a price to earnings ratio of] 32x, and now it’s on 14x. Pearson was on 23x and now it’s on 14x. Johnson & Johnson was on 26x and now it’s on 14x."
The manager says he hopes markets soon correct, as there is the risk that valuations could become stretched.
"If prices become badly dislocated from earnings growth, you get a problem," he said. "To be honest I’d quite like there to be a fall, so that I can put some more money in to new ideas."
Evenlode Income, which is a top-quartile performer since its launch in November 2009, requires a minimum investment of £1,000 and has an ongoing charges figure (OCF) of 1.83 per cent.