Market bubbles are manias of emotion not valuation, and while we don’t quite have the mania yet, one of the missing ingredients is now coming into equities: retail investors, Roger Hirst told Real Vision during today’s Daily Briefing.

Hirst said that overall, retail investors are doing pretty well so far buying the dips and taking profits, but these new actors but could be the beginning of a mass influx of emotion.

He also pointed out that many are trading based on flows driven by the Fed’s balance sheet rather than fundamentals, which could be a shift in investment style that becomes more permanent.

The challenge now is figuring out whether the market is becoming a bubble and will go higher, or if the real economy fundamentals will reassert themselves. Hirst thinks they will – it’s just a matter of when. This is why he says time horizons are so critical to forming an investment strategy.

With the current level of volatility, a trader could make a 7% return in a couple of days, whereas an investor may chase a 7% return over an entire year. There are contradictions between those who invest for the long term based on their framework and those who execute trade ideas in the short term, Hirst said, but it is possible to do both.

“You could start with a trade and a trade could become an investment, but when volatility is this high it’s hard to take anything other than a trading view,” he said.