I hope you find this article useful. I found it to be quite an interesting topic to write about.
As advisers our job is to look out for market trends. We are not economists and our job is not to predict the future. Our jobs is to take into account what economists are saying, what the market is doing, what you want and merge it all together in a short, medium and longer term plan for you.
It is rarely a good idea to jump when the market jumps and we will cover that and other bits in the rest of the article.
Stocks and Shares market
Over time the market changes. This can be for a variety of reasons but it can cause a surge or drop in prices of various companies.
Pharmaceutical – The easiest example here would be Covid. Obviously a lot of money was pumped into the pharmaceutical industry from governments around the world in the hope of finding a vaccine or cure for covid. Looking at the Moderna share price for example, this is a good example of what can happen to shares and why it is important not to always jump.
We can obviously see the big mountain. Had you jumped in mid 2021 and not got out in time, you may have made and then lost a large chunk. Had you jumped in late 2021 you would have only lost. Had you been in there from 2020, you might have lost a little but maybe not depending on any dividend payments in the interim.
Technology – Technology shares are another good example, depending on how old you are you may or may not remember the dot com boom and crash. NVIDEA is share in particular that I think stands out in recent times. In early 2024 its share price really started to take off and towards the second half of 2025 it was still trading at all time highs. This is on the back of AI.
However there is expected to be a drop or correction with regards to AI investments according to economists. Again, going back to jumping at market changes, it is probably not the best idea to jump into shares when they are hitting new records, it might be a good time to jump out of it though or you might want to just sit where you are and see how it pans out for decisions down the line.
Overview
Every industry will have its own boom and bust and will depend on what is happening in the world. 2025 has seen a lot of investment into Arms companies and this is down to wars in the middle east and Russia/Ukraine.
Looking at the 2 examples above, Moderna was quite short lived. Pharmaceuticals also come with their own risks as medications can do long term damage that takes some time to be picked up on. Nvidea has been a much longer build up and ultimately may still come down in time.
The difference between Trends & Boom or Bust
Ultimately as financial advisors its not our job to pick up on the next boom or get you out before it goes bust. That is short termism. Our job is to help plan for life down the road and help you as best we can to achieve that goal.
Going back to the 2 shares above, Moderna had a short upward trend and then a longer, slower downward trend. We may well have missed the short upward trend due to how quickly it came about. If you were already invested in there we could well have got you out of there a lot sooner to ensure you did not realise all of those losses.
But on the flip side, you may not have wanted us to get you in there. This is where your risk appetite comes in to play.
Summary
As your financial advisor we are not here for the short term or to look at short term gains. We are here to keep your investments on an upward trajectory at a rate you are happy with and at a risk appetite you are comfortable with.
Your investment will have ups and downs and by regular reviews, we can do our best to ensure your investment is going in the right direction.