Understanding the investment landscape can help protect you during times of market volatility. Financial Adviser Gareth Stythe talks to Ryan Bridge about Bear and Bull markets, and what you need to be aware of during each market cycle. He also discusses the key factors that influence investor behaviour, and some of the common mistakes new investors make.
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Bridge talks Business: 19 August 2025
Episode Transcript
Ryan Bridge
Kia ora and welcome to Episode 45 of Bridge talks Business with Milford. It’s great to have you here. Share markets are your go-to for investors wanting to secure their future around the world. Here in New Zealand, it’s no secret we’ve got a bit of an obsession, a bit of a love affair with property. More so than say in the US, where investing in shares is more common. But with property in a bit of a holding pattern, in a bit of a slump in some places, more and more Kiwis are curious about stocks.
So, who’s keen and what are the top tips for newbies? Gareth Stythe from Milford is our man in the hot seat today. But first, your top five business bits from the past seven days.
1. US inflation was more benign than feared. The market’s watching closely for those tariffs pushing up prices. Core goods increased at a slower pace than the month prior, but there were still signs of persistent inflation in other categories, which makes the Fed’s job all that bit trickier this week. Watch out for signs from Jerome Powell at Jackson Hole, which is like the Super Bowl for central bankers.
2. Headlines around a potential resolution to that war between Ukraine and Russia were dominating the markets last week. Trump met with both leaders and EU leaders trying to hammer out some kind of deal. This has yet to eventuate, but markets are watching closely given the applications for risk appetite and inflation.
3. Partial inflation data in New Zealand showed CPI is likely to rise back up to the top of the RBNZ’s inflation band in the second half of this year. Strength in food prices and electricity – you’ll feel that in your back pocket. The Reserve Bank’s been watching this closely ahead of a rate decision later today.
4. Across the Tasman we go, where the RBA cut 25 basis points, as expected. The guidance implies more cuts are likely later this year given progress around inflation.
5. Chinese activity data was really weak last week. Deflation continues to be their big problem. Overcapacity in key sectors, which may actually be a blessing to inflation in non-US countries, if China exports those cheap goods elsewhere.
And let’s crack into our feature interview for this week’s podcast. There’s a whole range of people, from all walks of life who are thinking about investing, getting into investing, new to investing.
So, we’re going to talk to Gareth Stythe, who’s a Financial Adviser at Milford. Some of the questions that they have and some of the terminology that’s used that might be confusing to some people. We’ll talk through all of this today on the podcast. Just a note that this segment is informational only and should not be considered financial advice. Gareth, welcome to the show.
Gareth Stythe
Thanks for having me, Ryan.
Ryan Bridge
Great to have you here. Right. Let’s kick off with investing, and who’s calling at the moment – who’s interested in investing? There’s a whole range of different groups that are not only thinking about it, but actively wanting to get into investing. What are you seeing?
Gareth Stythe
We’re seeing three main themes at the moment. So, the first is demographics – and that’s really people either pre-retirement or having just retired. And they may have sold a house and be downsizing for their retirement years or just accumulated savings and looking to get some advice for their investments. The second theme we’re picking up on is that there are limited alternatives at the moment out there, so interest rates have been coming down, and term deposit rates. People did have maybe a six or a five handle on their term deposit. Right now they’re looking at three-something for returns. So, after tax that’s not too good. And also the housing market has been pretty moribund over the past five years. So yeah, people are willing to look at investments for retirement now. And the third area is just a growing awareness of the stock market as a tool for investing for retirement. And that’s probably because of the advent of KiwiSaver. You know, that’s been around for almost 20 years now. And so it’s got a good reputation and a good head of steam. So, those are the three main areas that we’re seeing at the moment. And it’s pretty busy.
Ryan Bridge
Exposure and trust are very important things. And I think you’ve mentioned KiwiSaver. It’s opened our eyes to this world of investing hasn’t it? Especially for younger people. It’s created real awareness and some opportunity there.
Gareth Stythe
Yeah. I think you’re right. The advent of social media has increased the awareness of stock market investing, not just for the retirees, but also the younger brigade as well. So there’s definitely more readiness to seek out investments like ours.
Ryan Bridge
And obviously we’ve had a topsy-turvy start to the year in terms of the markets. We’re seeing some pretty strong performance, particularly out of the United States at the moment. So what are people asking? What sort of questions have they got about the performance of the market at the moment?
Gareth Stythe
Well, one thing we’re hearing a lot of at the moment is that we’re in a Bull market. And so what is a Bull market? It’s when stock prices increase by 20% or more. And it’s usually accompanied by a good economic environment, low or decreasing interest rates, and a low level of unemployment. On the on the flip side, there’s a Bear market. A bear market is when stock prices fall by 20% or more. And are normally accompanied by a softer economic environment, high or rising interest rates and a high level of unemployment. Recently, we’ve been hearing more people refer to this market as a Bull market.
Ryan Bridge
And that’s giving people cause for, well, an encouragement to leap in. To jump in?
Gareth Stythe
Yeah, so it does create a bit of investor psychology. So we’re seeing people perhaps have a bit of fear of missing out. They’re willing to just jump in at the nearest moment to invest. And with that, it’s not necessarily the best thing to do because you’re foregoing the rational part of your brain, and maybe not thinking about a long-term plan, and the effects of potentially a Bear market on your investment plan. When we’re in those sorts of situations where there is a Bear market, and stock prices are falling, you tend to get a reaction from investors, the opposite, where they have fight or flight. So they’re really just having that response from their amygdala in their brain. They’re not using their rational part and they tend to settle at a low point. So listening to podcasts like this helps people to increase their knowledge about investing. And to be aware that volatility is a part of making investments to meet your long term goals.
Ryan Bridge
And the Bull and Bear phenomenon happens periodically, doesn’t it? It’s something we know will happen eventually – up and down. That’s what markets do. So what are some strategies to help deal with that, or how do you get people to wrap their heads around those?
Gareth Stythe
Yeah. So one of the confusing things about Bull and Bear markets, is it would be good if we knew when they were going to happen and how long they were. So, for example, the last Bull market started in 2009, and went on until Covid in 2020. That was 11 years and the American stock market went up by about 500% over that time.
The following Bear market in Covid was only three months long. With these Bull and Bear markets, knowing what the average length of them is doesn’t really do much good, because there’s such a wide variety in each different one. But it is important to know that Bear markets are generally shorter than Bull markets.
Now, getting back to your question, I think you said what were some of the strategies people can use? So one of them is to build knowledge. Before you make an investment in the markets, you should have that knowledge that there are going to be times like these when it’s not just all plain sailing, and have that as part of your plan. Your investment plan should be linked to your own financial goals. And then the third thing that you can do, is regularly review your investment plan so that it’s always up to date with your situation. And then there’s no surprises coming around the corner at you.
Ryan Bridge
We’re talking about new investors who haven’t done this before – completely new to it. What are some common mistakes that you see people make, or are most likely to make?
Gareth Stythe
One of the most common mistakes is people trying to time the market. A second one is people seeking to concentrate their investments in the latest, greatest thing. So, some examples of that could be, you know, technology in the 2000s. So there was the internet bubble in 2000 and stock prices were wildly overvalued and they fell by, you know, 70, 80%. And people were very overweight in that area because the previous returns had been very strong.
Ryan Bridge
So you don’t want to jump all in on one particular area. You want to hedge your bets a little bit. Spread your eggs.
Gareth Stythe
Yeah, yeah, yeah. So some ways to combat that is to have diversification across your portfolio. Get investment advice and perhaps employ an active manager who’s going to be making those decisions for you as to when might be the best time to be overweight in these areas and when could be the best time to maybe take some profits on those stocks.
Ryan Bridge
You mentioned Covid and global events like that. I mean good and bad – how do global events like that impact the markets and therefore impact your investments?
Gareth Stythe
Yes. So a lot of events happen all the time. And what we’re seeing at the moment is increasingly over the past 10 years is, that through your phones, we’re getting the images of these events that have been relayed to us directly 24 hours a day, almost. And with the algorithm, because these events attract your attention, then it tends to send you down a rabbit hole of linking those events together to more bad news because that grabs your attention.
At the same time, the events can cause market swings, but they tend not to cause a Bull or a Bear market. The things that cause long-term good returns are a good economic environment, low interest rates, and a low level of unemployment. And conversely, for a Bear market, it’s those higher interest rates and higher levels of unemployment.
So these events, while they happen and they’re very alluring to look at on your phone, they tend just to cause market swings, which can cause a bit of anxiety. And that’s why it’s so important to have a plan and to revisit that plan regularly, so that you’re not affected by your fight or flight response. You know these things are going to happen and that you’ve got a good plan that’s focused on good fundamentals, that’s going to see you the distance.
Ryan Bridge
We don’t help with that – as in the media – because when something like that happens, we talk about it all the time.
Gareth Stythe
I’m sure it’s like a good day. You go, “Yes, Trump’s talking”. Trump winning the election is a good thing for you.
Ryan Bridge
Yeah exactly. Something to chew through and talk about. So Gareth, here’s what I’m taking away from my conversation today:
1. Markets go up and down – there’s going to be volatility. It’s a function of the market.
2. Make sure you’ve got a diversified portfolio. So you’ve got all your eggs in lots of baskets.
3. And mainly you’ve got to have a plan. Is that about right?
Gareth Stythe
Yeah that is. What I would say to people is that market volatility is inevitable but it doesn’t have to be intimidating. With the right knowledge and a clear plan, you can set yourself up for good long-term success. And I think combining that diversification with expert advice and perhaps some active management can put you in really good stead for the long term.
Ryan Bridge
Lovely to have you on the show today. Thanks so much for being with me.
Gareth Stythe
Thanks, Ryan. Great to be here.
Ryan Bridge
And that was Gareth Stythe, a Financial Adviser at Milford. Don’t forget you can like, follow, subscribe and comment on these podcasts wherever you like to listen. Share it with your friends and your family. We love having you on board. And don’t forget, until next week, invest in yourself.
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