Anonymous
Anonymous asked in Business & FinanceInvesting · 1 month ago

why did people sell off so low during the March 2020 stock market crash? why they didn't wait it out?

in fact, why do people sell off in ANY stock market crash?

Update:

is it not true that the way that the “wealth transfer” works , ( and it happens over and over and over again) is they push assets high (just like the stock prices on the stock market) , everybody piles in, then they intentionally crash the price values of these assets , everybody jumps out and they sell at the bottom , the elite buy it all back up for pennies on the dollar and then they pump it back up again. And then people jump back in and do it all over again? why?

8 Answers

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  • Anonymous
    1 month ago
    Favourite answer

    2 words:  Margin call.  Many investors were leveraged to the gills in February and March.  Those investors had no choice - they HAD to sell once their stocks dropped by a certain amount, since they were using borrowed money to invest.  The broker (also the lender) won't let you lose past the point where you can pay back the borrowed money, so they start selling your stocks for you to make sure they don't lose.

    Investors that were not margined, on the other hand, were likely aware that the market was in a bit of a bubble, and they were quick to sell once it started to burst.

    Point is, the people who would normally "buy the dip" weren't financially capable of buying the dip, so there were only sellers for a while.  Market makers also got into situations where they had to sell weakness to raise cash and facilitate all the puts people were buying, which spiked the markets down even further.

  • 1 month ago

    Because some stocks go down to zero and never come back up.

  • kswck2
    Lv 7
    1 month ago

    It is a herd mentality. If my stock is $100, and it suddenly drops to $80, then I would fear that it is going to drop to $60 and dump it now. And millions of investors did just that, dropping the bottom out of the market. 

  • 1 month ago

    Because people panic. 

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  • Anonymous
    1 month ago

    I'm glad they did though. I picked up shares of CCL, DAL, AAL, LUV, and UAL at a bargain and am already sitting on 50% gains on most of them.

  • Anonymous
    1 month ago

    Panic and fear mostly. No guts, no glory. I bought 5000 shares of AMD for $2 a share in 2015 when they were on the ropes. It's over $80 a share today.  

  • 1 month ago

    Short sightedness and panic. 

  • yodi
    Lv 7
    1 month ago

    the US burgeoning debt is propping up the markets

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