These investors are most likely to 'freak out' during a market downturn

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September 29, 2021

Good morning, Broadsheet readers! Janet Yellen urges Congress to raise the debt ceiling, Greta Thunberg has no patience for climate slogans without action, and the investors most likely to ‘freak out’ during a downturn may not be who you think. Have a great Wednesday.
– Stock slide. When it comes to the stock market, men still invest and trade in greater numbers than women. But when there’s a downturn, who weathers it better?
The investors most likely to, scientifically speaking, “freak out” during a market crash are those very same investors who stereotypically dominate the field. According to a new study, married men over 45 who think of themselves as having “excellent investment experience” are most likely to “panic sell” during a downturn.
The research comes from the Massachusetts Institute of Technology (and “freak out” is their term.) The paper analyzed 600,000 brokerage accounts and defined a panic sale as “a plunge of 90% of a household account’s equity assets over the course of one month, of which 50% or more is due to trades.”
Stereotypes often peg women as “risk-averse” to explain why men are more likely to invest and trade, especially as retail brokerages like Robinhood have boomed in popularity. But what gets classified as “risk aversion” can sometimes just be smart, carefully considered decision-making—and that pays off when the market takes a dip.
Read more from the MIT study’s findings via Bloomberg here.
Emma Hinchliffe
emma.hinchliffe@fortune.com
@_emmahinchliffe
The Broadsheet, Fortune’s newsletter for and about the world’s most powerful women, is coauthored by Kristen Bellstrom, Emma Hinchliffe, and Claire Zillman. Today’s edition was curated by Emma Hinchliffe.

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