When is the greatest risk? Market highs? or Lows?

1. Cycle of Emotions –
when is the greatest risk?
• Many may have seen this graphic in some
form
• But … what does it mean?

2. • Which has greatest potential return?
• A to C? Or B to C?
Future
C
A
B

3. • Which has greatest potential return?
• A to C? Or B to C?
Future
C
A
B
The greatest price increase is from B to C (during Frightened)

4. • Which has greatest potential loss?
• A to C? Or B to C?
Future
A
B
C

5. • Which has greatest potential loss?
• A to C? Or B to C?
Future
A
Note: There still may be a loss if you buy during
“scary markets,” however, potential loss is less.
Assumes broadly invested in indexed funds, not
individual stocks.
B
The greatest price decrease is from A to C (during Elated)
C

6. Cycle of Emotions –
when is the greatest risk?
• Many may have seen this graphic in some
form
• Now … you may see what it means when
emotions are out of sync with potential
returns