Motivation for investors that bull market isn't unreal
The recent recession in the global markets has resulted in a huge setback in the investors' confidence. A study by Barclay Wealth has revealed a very interesting information about the investor sentiment. It says that the pain of loss due to the recession has been so much in the investors worldwide that the subsequent bear market rally gains have also not been able to offset the risk appetite of the investors. It is also pointed out by the study that the pain of losing the same amount which is gained later is double the pleasure of gaining it. Therefore it can be concluded from this that the risk appetite has been permanently damaged and what's more unfortunate is that it's not going to recover to the same extent ever.
On the other hand, a very positive news or global cue is also unable now a days to offset a lasting rally because of cautious stances taken by the investors worldwide by booking profits at higher levels and waiting for an almost obvious correction thereafter for the next leg of buying. This indeed is a serious hindrance to the consistency in the tentative rally in the global markets that we can look forward to. Liquidity alone can't solve the problem of loss of investor confidence and any negative trigger will result into a lower bottom for certain. Therefore, saying that the worst is over is like saying that there won't be any more earthquakes on this planet in the times to come.
Wait and watch is a strategy taken by the investors when the markets slides after this kind of an alarming recession. But buying confidently on the dips is prerequisite for the significant growth of the emerging markets all over the world. Fundamentally strong businesses are not the only criteria for buying in a country's economy any more. The domestic demand story of the country like India and China can give a temporary boost to the investors' confidence alright, but a lasting rally coupled with a subsequent buying on strength is what's needed for a convincing revival of the investors' belief that bull market is not an obsolete idea in world markets.