A bull market is characterised by rising stock prices, economic growth, and positive investor sentiment.

A bear market is marked by falling stock prices, economic contraction, and negative investor sentiment.

Bull markets typically coincide with strong economies, low unemployment, and high consumer spending.

Bear markets are often associated with weak economies, rising unemployment, and decreased consumer spending.

In bull markets, investors are optimistic and more willing to buy stocks, driving prices higher.

In bear markets, investors become pessimistic and may sell stocks or avoid investing, further pushing prices down.

Bull markets generally present lower risk for investors, as most stocks are increasing in value.

Bear markets are typically more dangerous to invest in, with higher volatility and declining stock values.

The ‘carry trade’ risk. Many big professional investors use a strategy called the ‘yen carry trade’. They borrow money in Japan (where interest rates are very low) and invest it in the U.S. stock market or high-tech companies (like Nvidia or Apple). If the yen suddenly gets stronger, those loans become much more expensive to pay back. To cover their costs, these big investors might suddenly sell their U.S. stocks, causing the stock market to dip.

Impact on tech & large companies. Because many U.S. tech stocks are tied to the ‘carry trade’ mentioned above, a yen intervention can cause temporary volatility (price swings) in the S&P 500 and Nasdaq, even if the companies themselves are doing fine.

Watch the ‘magnificent seven’ (a group of seven influential technology companies: Alphabet, Amazon, Apple, Meta Platforms, Microsoft, Nvidia, and Tesla, known for their significant market performance and impact on the economy). They are often the first to be sold off when the ‘yen carry trade’ unwinds. If you own these, expect some volatility in your portfolio value during weeks when the yen is in the news.

Understand ‘value’ vs. ‘price’. A yen intervention doesn't change how good a company like Microsoft or Nvidia is, it just changes the maths for the people who borrowed money to buy those stocks. Use these moments to focus on the quality of your investments rather than the daily price fluctuations.

When a government buys shares in a company, it acts as a massive seal of approval. It signals to other investors that the company is strategically important to the country, which often causes the stock price to jump (a ‘rally’).

However, while the stock price went up on the news, the company is creating millions of new shares to give to the government. For existing investors, this means they now own a smaller slice of the total company pie. This is a key concept for beginner investors to watch when companies raise money.

‘Buy the rumour, sell the news’. You may notice that while the stock rallied, some experts suggest being cautious. Often, by the time a beginner investor reads the news, the easy money has already been made by professional traders who moved fast. Don't feel pressured to chase a stock just because it is up 25% in one day.

Understand ‘pre-revenue’ risks. USA Rare Earth is considered ‘pre-revenue’, meaning they aren't actually making money from selling products yet (their mine won't be fully ready until roughly 2028). As a beginner investor, remember that government backing helps, but it doesn't guarantee the company will be profitable soon.

Watch the fundamentals. Always check if a company has a path to actually making a profit. A government loan is a debt that must be paid back. High debt can be a burden on a company's future growth, even if the initial news looks positive.

The ‘safe-haven’ is shifting. Traditionally, investors buy Treasuries to protect their money during a stock market crash. The article warns that Treasuries may no longer be the perfect safety net they once were because they are becoming more volatile (risky) themselves.

When Treasury interest rates (yields) go up, stocks (especially ‘growth’ stocks like tech companies) often go down. This is because higher rates make it more expensive for companies to borrow money to grow.

Don’t ignore bonds and interest rates. Even if you mostly buy stocks or funds, keep an eye on US Treasury yields (especially the 10‑year), because they influence global markets and valuations.

Diversify beyond one country. Since this is a U.S.-specific debt problem, it’s a good reminder not to put all your eggs in one basket. Investing in international markets or ‘hard assets’ like gold can provide a hedge if the U.S. dollar or bond market struggles.