It is hard to believe that back in 1989 the FTSE100 index was only four years-old, the market’s trading floor still dominated by traders in brightly-coloured jackets, a symbol of their brokerage affinity, bellowing out orders and simultaneously gesticulating like frenzied tic-tac men.

Perhaps the most significant investment event 24 years ago was the Abbey National Building Society’s demutualisation and subsequent float on London’s nascent stock market.

Millions of investors received up to 100 Abbey shares worth £1.30 each which, over the following 11 years, would rise more than ten-fold in value.

It proved to be a very good decade for equities. In 1989 alone, the FTSE100 rose by 35 per cent; the market ended the year at 2,423. By December 1999, it had reached an all-time high of 6,930.

But why the sudden focus on 1989?

January 1989 marked the strongest ever start to a calendar year for the FTSE100 as the market soared by more than 14 per cent.

Last month’s 6.4 per cent growth meant the index enjoyed its brightest January in 24 years.

A pervading sense of optimism, driven by unique investment events such as Abbey National’s float, underpinned the phenomenal increase in the benchmark index almost a quarter century ago.

In particular, analysts and traders believed inflation would fall to more manageable levels. Their hunch proved correct, but what powered last month’s equally impressive increase?

The bad news is that it had little to do with domestic economic performance.

Whereas in 1989, most companies included in the FTSE100 index conducted the majority of their business in the UK, today the benchmark index is largely divorced from the domestic economy.

Major constituent companies generate a significant percentage (estimated at 79 per cent) of their earnings overseas.

This would suggest that any eye-catching increase in the index is perhaps more reflective of investor confidence in the international economy rather than indicative of huge faith in the domestic one. Moreover, there are three good reasons to support such a view.

First, America’s last-minute deal, announced on New Year’s Day, which prevented its economy from plunging over a ‘fiscal cliff’, ensured markets started the year in confident mood.

This was supplemented by reassuring news from China which reported encouraging economic data, while the widely-anticipated debilitating affects of Europe’s debt crisis have failed to materialise, for the time being at least.

Aside from these heartening international developments, it is worth noting that the FTSE100 index also tends to rise during January anyway.

In the 29 years since the index was first introduced, it has risen on 19 occasions, or 62 per cent of the time.

Nevertheless, last month’s spirited performance augurs well for the rest of 2013 — when the market last rose by a comparable amount (6.3 per cent) in January 1998, it proceeded to book an annual gain of 14.5 per cent.

So is January 2013 likely to be a turning point for investors — one which sees them return to equities in greater numbers?

Many brokers suspect it could be. Indeed, there is unanimity in the belief that the benchmark index’s impressive performance will hasten the already steady flow from ‘safe-haven’ bonds as investors comfortable with taking on greater risk recognise the value inherent in equities.

Whether this is an ideal time to buy, however, is debatable, as analysts who suspect the market will, at some point, experience a sharp reverse, advocate buying shares during such a correction.

That is as true today as it was in 1989.