The word ‘recovery’ is defined as; “A return to a state of normal health, mind or strength”. Here, in the final instalment of this short paper series, we address why financial markets, after a sell-off, return to this state.

Since market behaviour is ultimately a collective representation of the behaviour of a multitude of individuals (the herd of us) we can posit that understanding why we as market participants return to a state of normal health, mind or strength can lead us to the same conclusions regarding financial markets.