I often hear the connection between falling stock market indexes and the stockholders selling off stock.
My question is, if there is a mass selling off of stock, who is doing the buying? I presume other stockholders.
I recently sold stock because I'm purchasing a new house and needed a little more liquid assets to cover closing costs. Of course, I could have waited a little longer. But given that stock is in decline, I figured I'd hedge my bets and pull it out now before it devalues any further.
Ordinarily I would advise that its almost always better to hold, even during a recession. A lot of people view down markets as a good thing, since they can buy shares at a discounted rate. For every person that is selling shares, someone else is buying them. For some people, maybe they couldn't afford even a single share of Amazon because the price was like $1,200! I don't know what Amazon's share price is at now, but maybe its now $800 per unit. The point is, some people like it, especially if they're still getting a dividend on those shares.
Unless you have a true recession, like the Great Depression, it shouldn't crash the market. There are generally still enough people buying stock.
Edited by Hyroglyphx, : No reason given.
"Reason obeys itself; and ignorance submits to whatever is dictated to it" -- Thomas Paine