During 2011, investors became more risk‐averse as they reacted to a variety of events in both the United States and abroad. The European sovereign debt crisis (Greece, etc.) and banking crisis, and the confrontation over raising the U.S. debt limit, along with the downgrade in the rating of U.S. debt, led to significant shifts in risk tolerance as many investors lost their appetite for stocks. The equity markets, however, rebounded and posted large gains in 2012 and 2013. At this point, many investors were on the sidelines and only later realized that they had indeed overreacted to the earlier events.