How to Avoid an Investing Mid-life Crisis
<p>In the paper, “panic selling” is defined as a 90% decline in the balance of an investment account, of which <strong>at least 50% was due to the investor choosing to sell</strong> off assets.</p>
<p>Say you had $100,000 invested, and the stock market went down 20% — leaving you with $80,000. But then you started to freak out; “<em>what if the market keeps falling?</em>” So, you sell another $70,000. Leaving you with just $10,000 left invested and $70,000 in cash.</p>
<p>Despite its name, often, there appears to be a strategy behind the concept of panic selling. Many investors engage in panic selling to preserve capital and avoid further losses.</p>
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