GLOSSARY TERM
Panic Selling
Panic selling means selling investments quickly because of fear during a market decline.
What does this mean in practice?
It usually happens when prices fall sharply and emotions take over. The investor wants relief from uncertainty, but selling in that moment may lock in losses and also create the risk of missing the recovery later.
Example
The market drops 20%, headlines are negative and an investor sells everything because they fear the decline will continue. The decision is driven more by fear than by a long-term plan.
Why it matters
Panic selling is one of the most common ways long-term plans are damaged. It turns temporary market declines into real losses and can break the compounding process.
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