The Thing About Market Movements

Photo by Chris Liverani on Unsplash

The reality of markets is that they move up or down, driven by a wide range of variables, not all of them predictable.

When they’re up, we tend to think everything is rosy and those companies reaping the benefits can do no wrong (or at least very little wrong). Conversely, when they’re down, we think the world is going to hell in a handbasket, and there’s nothing that can be done right, so best to beware.

Of course, none of that is entirely true. While fundamentals certainly play a role, so does momentum, as do emotions. In other words, when the herd moves, it’s not hard to get carried away with it.

At times like these, though, it’s worth remembering that fundamentals and market movements can very often be decoupled. 

That a ‘cooling’ capital market doesn't mean your idea or offering has little or no value. It just means that others aren’t willing to take the leap. Not just yet.

So, all the more important, then, to focus on the fundamentals. To double down on what makes the business tick, what drives profitability and manage those variables extra carefully.

In other words, we can’t depend on the vagaries of external influences, including capital markets. 

We need to stay focused on those things we can control.