Not a number you have.
A mood you are in.
Calm Sunday
I can hold a 30 pct drop
Ticks the box . scores aggressive . goes 90 pct equity
Red Monday
Sell it all
Same person . same plan . pot down 3 lakh
Guiso Sapienza Zingales . 2018 . JFE
After the 2008 crash a bank's clients turned sharply more risk averse and sold stock. The driver was fear, not any fall in their wealth.
Malmendier Nagel . 2011 . QJE
The returns you live through reset your appetite for risk. Recent scars weigh most, and the effect lasts decades.
Illustrative scene . findings from behavioural finance research . 11 Jul 2026