What is a Mixed Market?

A mixed market is an investment market that is undergoing a period in which no particular trend is discernable by investors or analysts. In this type of market situation, the number and range of declining stocks is more or less offset by a similar number and range of advancing stocks, essentially creating what is sometimes called a stale market. While reading a mixed market and managing to identify what options to buy and which ones should be left alone is somewhat more difficult, it is still possible to make money in this type of situation.

Since a mixed market does not seem to be moving much in either the direction of a bearish or a bullish situations, investors are left with the task of focusing on particular sectors of the market to determine which individual stock offerings seems to be at least moving in a predictable direction. Here, the goal is two-fold. First, the investor wants to ascertain if there is any indications that holdings already included in the portfolio are likely to post a loss any time soon. If so, they can be replaced by similar options that are either posting modest gain or are remaining stable during the market lull.

Along with assessing the current status of holdings within the existing portfolio, investors can also scour the mixed market for options that historically experienced an upturn when certain factors took place in the past. For example, a stock option that is currently flat but has been known to undergo a rapid increase around election time in times past may be worth securing now, if there is an election pending in the next year or so. Assuming the investor can afford to hold the asset while the market remains in a more or less mixed mode, there is the chance of earning a significant return if that stock option does follow the pattern of past years and appreciate in value as the election draws near.

While a mixed market is not necessarily a time to earn a lot in terms of return, it is sometimes an excellent time to make plans for the future, when the market begins to aggressively move in one direction or the other. From this perspective, the temporary lull can be viewed as the chance to buy now while prices are stable, hold those assets until the unit price increases to a desirable level, then sell them at a profit. As long as the investor chooses the right investment vehicles for this approach, the mixed market can turn out to be an advantage rather than simply a lackluster period.