Financial Markets influences are felt by all market participants. Sometimes they impact the investment/ trade on the day; otherwise they impact the valuation of the investment assets held. Short-term traders and long-term investors alike need to be aware of the various influences on the markets.
Who/ what influences the daily performance of financial markets?
Is it ‘the Bulls’, ‘the Bears’, or other factors?
What is a Bull; and what is a Bear, in financial market terms?
What defines a Bull Market, or a Bear Market?
Whether the Bulls are running or the Bears are roaring – the markets continue to operate. So, should you be concerned about the state of the market at any time in your long-term planning?
Defining Bulls and Bears as financial markets influences
In financial markets –
- a Bull is a positive investor. They have a view that the markets are improving and are yet to get better; their ‘glass is half full’;
- Bears on the other hand take a pessimistic view of the markets and are certain that ‘doom and gloom’ will prevail. Their ‘glass is half empty’.
The stock market is in a Bull/ Bear phase once it has taken an upwards/ downwards move of twenty percent.
A notable relatively recent experience saw a Bear market early in 2008 following the start of the downturn in December 2007. A rapid return to a Bull phase startedf during April 2009 after ‘the bottom’ was struck around 9 March.
Strategy also influences financial market outcomes
In any event, these are terms that are more significant to short-term traders in shares than they are for investors. ‘Why is this so?’, you might ask.
As our clients are aware, we do not encourage ‘timing the market’ as regular entry and exit strategies. We acknowledge that there may arise occasions, when ‘topping up’ is happening, that we may adopt this approach.
For a principal investment strategy however, ‘time in the market’ is far more rewarding – and provides a greater opportunity to benefit from share market volatility.
Investing without fear of Bulls or Bears –
Using this tactic to establish an investment portfolio with a long-term outlook can be made over a number of tranches (instalments) that facilitate missing the highs and the lows of the market and, except where the market grows consistently throughout the installment period, is likely to result in an average entry cost more favourable than otherwise. This tactic is referred to as Dollar-Cost Averaging and helps to ‘even out’ the peaks and troughs generated by financial market influences during the implementation of an investment strategy – it is a process we have recommended in relevant circumstances for some time now.
How to invest confidently, without trader-type concern –
We encourage investors to take a strategic view of their investing and to largely ignore the title of the beast (the Bulls or the Bears) running at any particular time.
Be comforted, that – ‘we listen, we understand; and we have solutions’ to your wealth management concerns: and we deliver them through personalised, professional wealth management advice.
Our experienced advisers are available to review your investment portfolio and the strategy governing its structure and asset allocation. To arrange a meeting with one of them –
- phone our office on 07-3421 3456; or
- at your convenience, use the linked Book A Meeting facility.
( This article was originally posted by us in November 2009. It has been occasionally refreshed/ updated, most recently during April 2025.)
