Didn’t Read, Never Selling

Holy Guacamole! Yesterday’s market crash was caused by unsophisticated panic sellers. According Bloomberg: “Retail Traders Bailed on the Market Right Before Stocks Rebounded.”

From the article:

In a spasm of panicked selling early Monday, retail investors offloaded a net $1.36 billion worth of stock by noon, most of it in the first hour, according to data compiled by JPMorgan Chase & Co. strategist Peng Cheng. By his estimate, share disposals were 3.9 standard deviations heavier than the full-day average in the previous 12 months.

Essentially, inexperienced investors freaked out and sold their stocks at the worst possible time. They were overwhelmed by fear and caved at the market’s absolute bottom.

Had these rookie investors waited a few hours, most of their stocks and ETFs would have recovered.

The S&P 500 actually ended the day with positive returns.

Source