Replies to post #2311 on YRC Worldwide Inc (YRCW)

[Smith00]

Your clients have a dominate side of their brain that controls how they process information. Each side of the brain has its own unique and special abilities. The right side of the brain is spontaneous and acts on emotion, while the left side of the brain is logical and looks at facts and figures.Clients complete the risk profile questionnaire in the comfort of their homes or in your office. Typically their left brain, which does the logical and analytical thinking, may cause them to answer rationally but possibly underestimate their ability to withstand bear market pain. But what happens when emotions take over, such as during a severe market change? The right brain might become dominant and allow fears and dreams to override the left side’s ability to reason. So even though they said on your risk profile questionnaire (which they may have completed in the middle of a bull market) that they would “buy more” if their portfolio fell 40%, they are now in your office freaking out, telling you to sell everything. So much for the investor risk profile questionnaire.