What’s Market Sentiment? ๐Ÿ™ˆ๐Ÿ™‰๐Ÿ™Š

What’s Market Sentiment?

Sentiment is the prevailing feeling in the market from everyone who’s trading on it. Be they optimistic or pessimistic; moods swell around individual stocks, entire exchanges, whole countries, and even different forms of investment like bonds and real estate. We call it sentiment!ย 

Money and Emotions

When we feel strongly about a stock, we try and make an argument about it. Whether our position resembles fact or fiction, helping us make money or lose money, it’s indicative of our sentiment.

If a huge news story breaks, our immediate gut reaction to that news is again, our sentiment. Now, there are two ways it can go!

Bullish Sentiment

Conjure the image of a bull – aggressive, fearless, and charging forward. Needless to say, a bull on the stock market isn’t going to cower. Bullish investors thrust their horns upwards, buying into and believing in stocks that are tipped to do well in the future.

A stock is called bullish because investors believe it’s going to go up, not because it actually does. A soaring stock might enjoy a very bullish sentiment until it releases a new product which flops. Then, the market might start fearing it could go down. So the sentiment turns bearish!

Bearish Sentiment

Conjure the image of a bear โ€” sluggish, protective, and advancing cautiously, and when it attacks, it swipes its big claws in a downward motion, ripping you apart. Priority number one of an investing bear is not to lose money, and that drives the so-common negative sentiment it carries around. A bear will try to give a stock a pre-mortem, doing all it can to kill the idea of investing in it.

Bearish sentiment is known for being even more strongly felt than bullish sentiment, and it’s just as infectious, too. The stock market famously convulses with bull and bear sentiments that bring with them great booms and busts. For one reason or another, a bearish sentiment always follows the peak of a stock boom. It’s wild out there!

The Right Sentiment

Investing is a tough business, not least because money can be an emotional topic. Caving into market emotions rarely ends well, but keeping bias at bay is also a real challenge!

To be in the money, we investors must often play the waiting game, keeping a rational head until we can profit from the hoodwinked sentiment of others. In the meantime, we can masterfully balance our own!

As for day-in-day-out risk, be prepared to lose everything. Humans are natural born pattern-seekers, and itโ€™s easy to mistake shapes in the clouds for opportunities to make money.ย ย 

Investing

If saving sounded too dull and day trading sounded too hit and miss, try investing. Rather than looking only at the stock chart, active investors believe in whatโ€™s underneath. Weeks are spent turning businesses inside out and upside down, searching for clues that might reveal how much money theyโ€™ll make in the future. Any positive surprises in that department will move the stock up, but what investors really love, is the stock of a company they can hold forever. That way, they benefit from lower taxes, lower brokerage costs, and the magic of compounding!

Investing, however, isnโ€™t just for full-time market detectives. Funds bring together a basket of pre-selected businesses for you to track passively, all fitting different themes. They allow you to get on with your life and have your money working for you in the background, but of course all investments can go down.

Investors always need to know why they own what they own, and stay disciplined when markets tank. Unlike saving, invested money can do a disappearing act. And unlike day trading, you can only sit back and watch.

Some buy stocks, some short stocks (betting against them), and some draw an instant passive income from dividend-paying stocks. Most can be sold at a momentโ€™s notice, and light dabbles in Invstrโ€™s fantasy finance can go a long to honing your contrarian instincts. Investing works!

Time for you to take charge!

Priority number one is not to lose money, but making it is a close second. Carve out that emergency fund, pay off any onerous debts, and nail down a few fantasy stock market bets. You work hard for your money. Time for it to work hard for you!

Share:
More Posts
Get your daily Invstr Crunch

Get the market news and updates you need, delivered to your inbox or available on our daily podcast.

Risk Disclosure:

Invstr is not a bank and banking services are provided by Vast Bank, N.A.

Brokerage and Banking services are currently only available to U.S. residents.

Invstr app and web services are provided by Invstr Ltd. Advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC) details of which can be obtained here. Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value.

Investing involves risk and can lead to losses. Past performance does not guarantee future results.

Invstr app and web services are provided by Invstr Ltd. Invstr+ advisory services are provided by Invstr Financial LLC, an investment adviser registered with the Securities Exchange Commission (SEC). Securities brokerage and custody services are provided by Apex Clearing, a broker dealer registered with the SEC and a member of FINRA and SIPC. There is no bank guarantee on securities and securities may lose value. Vast Bank N.A. a nationally chartered bank and member of the FDIC, provides the banking products, including the products and services related to digital asset accounts. As with any asset, the value of Digital assets can go up or down and there can be a substantial risk that you lose money buying or holding digital assets. You should carefully consider whether trading or holding Digital assets is suitable for you in light of your financial condition. Your digital account does not support wallet to wallet transferring of your digital assets (i.e. cryptocurrencies) outside the platform. Any Digital Assets in your digital asset account are not insured by any government entities, including but not limited to FDIC or SIPC. The Invstr Visaยฎ Debit Card is issued by Vast Bank, N.A. pursuant to a license from Visa U.S.A Inc and may be used everywhere Visa debit cards are accepted. Invstr Ltd, Invstr Financial LLC and Invstr Securities Ltd are subsidiaries of Marketspringpad Holdings (collectively “Invstr”) and Invstr is solely responsible for the application services and website content.

Watchlists provided when users first access the service are not a recommendation to invest. Instead they are provided to help users better navigate the service. Users are free to edit and create their own watchlists. From time to time, Invstr will suggest instruments solely based on an individual’s interest and the interest levels of the Invstr community. The statistical and portfolio builder models generated by Invstr do not reflect actual investment results and are not guarantees of future results. Comments provided by Invstr leaders, influencers or members of the Invstr Community are not recommendations and should not be construed as such. Invstr does not endorse the content or the positions posted by them. Their investment approach, and that of the models provided by Invstr, may be different from yours and may not be appropriate for you.