Timing is Everything: Investor Emotions Over a Full Market Cycle

A picture can sometimes speak a thousand words. The graph below illustrates how investor emotions can oscillate from fear to greed through a full market cycle. The key is to understand how this can be used to know to reduce risk and when to increase it, and the timing is the opposite of what most people feel.

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3 responses

  1. Pingback: Investor Sentiment Reaches Extreme Fear « Asymmetry Observations

  2. Pingback: Do you choose the blue pill or the red pill? « Asymmetry Observations

  3. Pingback: What emotion is driving the market now? Extreme Greed « Asymmetry Observations

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