Experienced investors are more relaxed, often referring to it jokingly as the shock and scare market.

The Australian share market closed at an all-time high on July 30 then fell 5.5 per cent over the next week to a low on August 6. From there it has slowly recovered around 2 per cent.

Some say a fall was to be expected with the market at a record high, but there isn't any logic why that should be so. The trigger for the fall was an escalation in the US-China trade war.

US President Trump is pushing China hard for concessions but they aren't backing down.

The share market received a reality check that a resolution may not be reached, hampering global trade in the future.

However it seems likely that President Trump will want the issue resolved before his re-election bid next year.

Share prices are supposed to be determined by logical analysis.

The Stock Exchange focuses clearly on ensuring the market is always fully informed of the facts. However that doesn't mean investors always act logically. Far from it. Investment decisions are driven by emotions far more than authorities would have us believe, especially short term.

There is a natural tendency to over-react on both the up and downside. Speculators trying to make a quick buck exacerbate the situation by spreading rumours that suit their position.

The All Ordinaries is simply a measure of the market average so if company share prices are emotionally determined then the index is too.

It is difficult to work out the true value of some companies and their shares, but with large, well-established and mature companies it is possible. Their trading price fluctuates around the true value over time. It reverts back towards the true value if other major influences are absent.

In reality there usually are influences - industry and market trends, company strategies, competitors' actions, new technologies and yes, US Presidential tweets. Professional investors try to keep abreast of these, and market analysts provide reports to their clients and followers.

Sudden share market movements are normal. A fall of 5 per cent is small compared to some and no need for serious concern. The fact that bargain hunters re-entered the market quickly suggests it is not seriously over-priced.

The best thing about share market falls is that they provide buying opportunities. The good quality shares that long term investors want to buy but they thought too expensive are then closer to their true value.