Even though its precisely what many financial advisors tell their clients not to do, its understandable that a tanking stock market scares some people into cutting their losses and selling their shares. Understandable, maybe, but it wouldnt be off-base to guess that those who divest are inexperienced or too poor to weather market volatility.
But the other group that was more likely to shed their assets was a little more surprising. Starting in September 2008, the top 0.1 percent of income earners started selling off significantly more of their assets, and continued doing so until the start of 2009. Sales of mutual-fund holdings were more prevalent than direct-stock sales, with mutual-funds climbing to 50 percent of all sales, compared to just 30 percent during the pre-crisis period. Unsurprisingly, most of the assets that were sold were related to the financial industry.
