The recovery is going to be surprisingly substantial, says James Grant, investment historian and editor of Grant's Interest Rate Observer.

“It’s pretty darn zippy,” Grant told Wealthtrack.

“I think it will surprise to the upside. . . I’m not going to give a number nor can I give a date. . . but I think it’s going to be surprisingly strong,” Grant says.

“The consensus is for next year to generate growth in our gross domestic product of about 2.5 percent after adjustments for price fluctuations, and I expect that to be better certainly for a couple of quarters.”

Widespread bearish sentiment is more a reflection to the human tendency to overreact to bad economic news than to the economy itself, Grant points out.

However, his advice to investors is to exercise caution: "We cannot know the future — therefore seek a margin of safety."

Grant, who is typically more bearish than bullish, also points out that Wall Street is not an investor’s friend, and advises that investors buy investments not when they feel good, but when they feel the worst about a particular investment.

Factory activity in the United States expanded by the most in three and a half years in October, while manufacturing in the euro zone grew for the first time in 17 months, Reuters reports.

Manufacturing also picked up in Britain and China, suggesting a global economic recovery is under way, recent surveys showed.