Scared of the debt crisis in Europe, a potential slowdown of Chinese growth, stubborn unemployment numbers? I don't blame you.

In September, consumer confidence marked a multi-month low, as investors pulled billions of dollars out of equities. Individual investors like you and I were too fearful to put any money in the market.

The good news? It's only two months later, and we're back, baby. And I've got two stocks I think are great buys right now – including one that I even purchased for the portfolio that I manage.

Are we really back?
I certainly don't have a crystal ball, but I can tell you what the numbers say.

  • The S&P 500 has surged by 17% since late August, officially reaching its levels from the pre-Lehman collapse days.
  • The American Association of Individual Investors states that 48% of investors are bullish on stocks (as of last week) -- the highest level since February 2007. Bearish sentiment is at its lowest point since January 2006.
  • In August of this year, investors pulled $23 billion from U.S. equity funds. Since early September, about $8.4 billion has been poured back into those same funds, drastically changing the direction of fund flows.

Institutions aren't the only big buyers. Out of that $8.4 billion, about $2 billion (or 25%) came from retail investors. Of course, investor optimism can signal a frothy market, and there's no doubt that there are plenty of concerns and reasons to be cautious in our outlook. Still, the news suggests that now may be as good a time as any to make sure you've got money invested.

Finally, some good news
Some random event isn't causing investors to suddenly become bullish. This is no amazing and satisfactory fluke (like the Dallas Cowboys starting their season 1-7). There's good reason for all our optimism!

First, it doesn't really hurt that the Fed is willing to pump some $600 billion into the bond market in an attempt to jump-start our sluggish and wavering recovery. It also doesn't hurt that Bernanke and company plan on keeping the federal funds rate at historic lows for "an extended period." Say what you will about quantitative easing, but so far, the news hasn't hampered the recent market surge.

Second, and more importantly, the third quarter has been an absolute blowout. In the month of October, 198 companies raised their profit estimates above analyst projections, whereas only 130 cut them. This is the biggest gap since Bloomberg began keeping track in 1999.

Try this out for some context. Over the past 10 years, the average ratio of companies whose earnings beat forecasts compared to those who lagged them has been 0.59. In October, that number reached a shocking 1.5! Companies have been able to cut costs, improve productivity, and streamline operations -- and it's having a massive impact on the bottom line.

For instance, Ford (NYSE: F) recently announced that its third-quarter net income rose by 68%, as it increased market share and fetched higher prices for both cars and trucks. Earnings came in roughly 26% greater than what analysts expected. UPS (NYSE: UPS) just announced a raise to its 2010 estimate, and says it expects growth of about 52% for the year -- its largest increase since 2000. Not exactly a bad sign, considering that UPS is the world's largest package-delivery company.

And despite perceived weakness in global demand, industrial and material companies like Caterpillar (NYSE: CAT) and Arcelor Mittal (NYSE: MT) are booming as well. Caterpillar's revenue shot up by 53%. Machinery sales rose by 84%, and engine sales by 21%; ultimately, Caterpillar now says that orders are outpacing shipments.

Steel prices have taken a hit, and the industry is still in uncertain territory -- U.S. Steel (NYSE: X) and others have reported striking recent losses. Nonetheless, Arcelor posted impressive numbers: 48% increase in net earnings on a 30% jump in revenues. Did I mention that it walloped analyst expectations by more than 100%?

No wonder investors like us are excited --the market is finally moving!

While you shouldn't run blindly in the streets, scooping up shares of any old company, it's important to make sure you get in the game.

Take two for the road
Just because it's a bull market doesn't mean every stock will rise; after all, in a bear market, not every stock goes down. In your quest to choose wisely, let me offer two stocks to consider.

First up is Nucor (NYSE: NUE), one of the most efficient and innovative steel producers in North America. Although it's tied directly to the economy, Nucor is a relatively safe bet if you're scared to get back on the investing field. With a beta of 0.89, it likely won't be wildly gyrating up and down, and it pays a great 3.8% dividend. I actually just bought shares for the real-money portfolio that I manage.

Second is Activision Blizzard (Nasdaq: ATVI), the world's leading video game publisher. Activision has an ironclad balance sheet with zero debt and $2.8 billion in cash. It has a huge arsenal of franchise games to rely on, including World of Warcraft. The online multiplayer role-playing game now has way more than 10 million subscribers, and it produces incremental revenue at a time when other video game companies are struggling. In fact, that's why Activision caught the eye (and earned the recommendation) of the analysts working for the Motley Fool's Million Dollar Portfolio.

If you'd like to get more stock ideas similar to the ones above, enter your email in the box below to get "Motley Fool Top Picks & Perspectives 2011," a new free report with stock recommendations and portfolio guidance for the year ahead. We'll also tell you more about Million Dollar Portfolio, our real-money portfolio service that buys the best of our investing ideas, opening for the last time this year. To get started, just enter your email in the box below.