Watch the tech stocks as caution reigns over markets

IT is three months to the 10th anniversary of the stock market crash. Lehman Brothers declared bankruptcy in September 2008, setting in motion a swift downward draft from global shares and commodities to gold and property. US Treasury bonds, backed by a surge of the US dollar, were by far the safest and also profitable investments.

After a market bloodbath, shares of industrial and business companies bottomed in November 2008. In December 2008, the Bernie Madoff ponzi scheme was exposed, causing banks and other financial shares to tumble to their nadirs in February 2009.

The chart by Jean-Paul Rodrigue of Hofstra University, Long Island New York, shows how the psychology of investors changes in bull and bear markets. As the market reaches the bottom, brave, sometimes foolhardy investors begin picking stocks that can fall further before they turn around. Then the market begins to take off, a period which invariably provides the best gains for those investors who bought at the bottom.