Scenario 1: Conclusion

You chose to invest all your money. You probably made this decision for one of the reasons listed below.

• A. You knew that the numbers suggested you should not buy, but hey, you don't play by normal peoples' rules
• B. You knew this was a scenario about an "irrational market" so you decided to make an irrational decision to outsmart the computer.
• C. You lost control of the mouse and clicked on this by accident.

If you chose option C, please go back and try the scenario choices again.

If you haven't guessed it by now, the price of XYZ seems to be on its way up, up, and away - for no apparent reason. If you are fully invested it seems you have made the right choice. But before you go patting yourself on the back, remember that you made the right choice in an irrational market. (Is "congratulations" an appropriate word or not?)

The hardest part about being invested in a market like this is knowing when to sell your shares. The market has performed like this on a number of occasions for different lengths of time. Two of the most notable times were in the early 1920s and the late years of the 1990s. It is also worth noting that both of these irrational markets saw investors making huge amounts of money, but they were both followed by huge losses:

• The Black Thursday stock market collapse which triggered the Great Depression, and
• The 2000 drop which saw the Nasdaq market lose over half its value.