If you’ve only started investing in the last few years, today’s market backdrop can feel confusing. Markets are hitting highs, optimism is back, and every second headline seems to promise the “next big thing”. What we’re in right now is broadly described as a bull market – a period of sustained rising prices, improving sentiment and growing confidence among investors.
Globally, equities have been trending higher since the market lows of late 2023, meaning we’ve been in this upswing for close to two years. Bull markets don’t move in a straight line, but they are typically supported by improving economic growth, easing inflation pressures and expectations that interest rates are closer to peaking than rising. That’s largely the backdrop we’re operating in today.
This environment is often described as “risk-on”. That means investors are more willing to take risk – favouring shares over cash, growth assets over defensive ones, and higher-risk segments of the market in search of returns. Risk-on periods can be rewarding, but they can also encourage behaviour that undermines long-term success. Bull markets don’t end because people stay disciplined; they end because people abandon the process.
Here are my three tips for investing when markets are moving quickly
1. Tune Out The Noise
Bull markets amplify everything: headlines, social media chatter and emotional decision-making. The real risk isn’t missing out; it’s reacting to every market wobble or hot tip. A practical habit is to reduce how often you check your portfolio and to be selective about where you get information. Long-term investing is about consistency, not constant action.
2. Stick To Your Plan, Let Asset Allocation Do The Heavy Lifting:
Decades of research show that asset allocation explains far more about investment outcomes than picking the “right” stock. Diversifying across asset classes, sectors and geographies matters more than trying to outsmart the market. Long-term investing is not linear, even the best designed portfolios will experience drawdowns. Thoughtful asset allocation acts like a seatbelt during turbulence: it won’t stop the bumps, but it’s there to protect you so you can stay invested and reach your destination over time. If your portfolio only works when markets are rising, it’s not a strategy – it’s a position.
3. Don’t Confuse A Rising Market With A Rising Risk Tolerance
Bull markets make investors feel braver than they really are. It’s all fun and games until volatility returns. Be honest about how much risk you can handle. The more important question isn’t how much risk you’re comfortable with emotionally, but how much risk you can actually afford to take.
Risk capacity, shaped by time horizon, income stability and liquidity needs should anchor portfolio decisions, with risk tolerance coming second.
Remember: strong markets are exciting, but good habits are what compound over time.
