Panic sellers during stock market dips is more likely to be men over age 45, or who are married with children, research finds.
Those chasing portfolio stability by trading during volatile periods may cause the opposite results.
Someone prone to emotional moves may need a system of “checks and balances,” financial experts say.
Panic sellers during stock market dips is common after stock market dips, and it’s more likely to happen with certain investors, according to research from the Massachusetts Institute of Technology.
When the market drops, men who are over age 45, or are married with children or have self-described “excellent investment experience” are more prone to sell-offs, the research shows.
“These are significant drivers of panic selling,” said co-author Chi Heem Wong, researcher at MIT. And many who leave the stock market don’t return.
Control bias
Some males face pressure from an early age to “figure it out themselves,” which may trigger a control bias, or thinking that can influence results when they can not, said certified financial planner Teresa Bailey, wealth strategist at Waddell & Associates in Nashville, Tennessee.
Checks and balances
As humans primed with survival instincts, it can be challenging to avoid “fight or flight” responses like hitting the sell button when stocks plummet, Clayman said.
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