You can tell a lot about the mood of the market by the questions asked by investors and the topics in which they are most interested. I would hazard a guess that the current mood is cautious but determined to prosper; recognising the importance of knowing how to make the best decisions in order to avoid foolish mistakes in the future. At least that was my conclusion from people attending The Stock Market Show on 12 September.

The atmosphere certainly didn't seem to reflect the performance of the major stock market indices. If we take the FTSE 100, a near-14% drop since May would imply investors are in a negative frame of mind. They would have good cause to be upset, given the implications of China's ongoing economic setbacks to the West, commodity price volatility, uncertainty over the direction of interest rates and a surprise shift in the political landscape in the UK (and Australia).

But what if you assembled more than a thousand investors in a single location and tried to determine their mood? While we didn't explicitly canvass attendees' opinions at The Stock Market Show last weekend, an event run by Shares in partnership with the London Stock Exchange, I did chat with countless people on the day and not a single person expressed any panic at the current state of global markets. The overriding message was one of enthusiasm towards finding the best solution to make money over the long-term.

Keep your chin up

Yes, we had some people at the event asking about the best time to sell stocks; others talked about the merits of shorting stocks and indices during current market volatility, so that they could employ a hedge and avoid having to liquidate all their 'long' holdings.

What I definitely did not see was any significant fear among investors. Neither was anyone asking for that 'sure-fire red hot tip' to make a quick buck that is often the major talking point at investor conferences. Instead, it was a venue full of individuals with a wide range of investment experience, from amateurs to professionals, all united by the desire to find the best way to construct and maintain their portfolios.

It was particularly pleasing to see such a healthy interest in exchange-traded funds. Attendees were eager to know how the low-cost products can play an important part in creating a diversified investment portfolio. And the panel session I chaired on investing for income attracted a full room at The Stock Market Show.

I felt the room sit up straight when the panel discussed how dividends had made up a large slice of overall returns for shareholders during bear markets. And that brings me back to investors' mood and why people were right to have a cautious tone. While I liked the fact that attendees were focused on getting the most from investing and avoiding losses, one must ask why few people seemed overly-nervous. After all, there is a growing risk that a US interest rate could knock global stock markets truly off balance, even if just temporarily.

Cautious is right

Investors need to be cautious in the near-term. You might have come away from The Stock Market Show feeling that you have identified the products and strategies in which to create future wealth, yet rushing in now to buy everything to fill your portfolio could be a mistake.

The day this article is published (17 Sep) may represent a new turning point in global markets, as it is the point at which the US Federal Reserve could finally raise interest rates. As I write, Bloomberg is running an article entitled 'Fed Rate Hike: Catastrophic for investor confidence?'. Don't dismiss this as sensationalist journalism.

With Hargreaves Lansdown reporting that UK investor confidence hit a 2015 high in August, you might wonder why the fuss over what the US decides to do.

What happens over the pond has relevance to global stock markets. The most extreme view is that US interest rate hikes could trigger a new global debt crisis.

A new report from the Bank for International Settlements highlights early warning indicators surrounding debt in emerging markets. It says US interest rates have a 'statistically and economically significant impact' on corresponding rates in emerging market and smaller advance economies.

The past few years with the Greek debt crisis and China economic growth wobble have been proof that UK stock markets can be heavily influenced by events in other parts of the world. With many negative signs on the horizon, it really is important that you develop good portfolio construction and management skills. It is definitely the time to employ diversification and not have all your money riding on a handful of stocks.