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Majority of Investors Avoided Taking Action in Recent Market Correction

This week’s Sentiment Survey special question asked AAII members what portfolio action, if any, they took in response to the recent market correction. The majority of respondents (62%) said they didn’t make any change or only made a small change. Many of these respondents described themselves as being focused on the long term, viewing this month’s correction as being only temporary in nature or not severe enough to warrant any action. A few of these respondents described the correction as lasting too short of a time for them to take advantage of it. Nearly 33% respondents said they took advantage of the decline to buy stocks or funds. Some said they took advantage of the reduced prices to either add to current positions or buy new holdings. Just 7% of respondents said they sold stocks during the correction. A small number of respondents said they sold some positions and then bought new positions.

Here is a sampling of the responses:

  • “I did not take any action because the economy is still strong. The correction seemed temporary.”
  • “I bought stocks. Why? They were on sale.”
  • “I bought three positions that I had my eye on.”
  • “I sat on my hands. It has worked for 30 years.”
  • “I took no ‘action,’ however, several of my stocks were stopped out rather naturally.”
  • “Bought a little. The correction was mild, I didn’t have time and valuations would have to be better to do more.”

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