Panic Selling

Panic Selling – As the term suggests, panic selling is a condition in which everyone starts to sell their shares in the stock market. Not only does this happen with the inexperienced or new investors, it also frightens the experienced and sturdy long time investors too.

Panic Selling aptly defines this condition as the investors simply sell all of their shares with little regard for the price they would be getting, even if the sale would happen at a loss. In this situation, the selling happens out of fear and emotional weakness and investors fail to find rationale behind it. They fail to identify any fundamental reasons and factual information behind their decision to sell.

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This can be caused by a false rumor or news about the markets or some unfavorable statement made by ruling political party. It may also happen due to random behaviour of the share market without any outside influence. Mostly panic selling occurs due to false rumour spread by some unscrupulous which may result in market crash.

Edited and Updated 08th March 2014

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