Married, middle-aged men more likely to panic sell investments when markets crash. Why?

The importance of learning to embrace ‘manxiety’.

Abel Ang | November 13, 2021, 10:21 AM

COMMENTARY: A Massachusetts Institute of Technology (MIT) study found that married, middle-aged men are more likely to panic sell their investment portfolio when there's a downturn.

Writing for Lessons on Leadership, a new series hoping to inspire the next generation of Singaporeans through the stories of Singapore’s many successful business leaders and entrepreneurs, our contributor Abel Ang reflects on this phenomenon and offers some possible reasons why. 

Abel Ang is the chief executive of a medical technology company and an adjunct associate professor at Nanyang Business School.

Investors who are male, over 45, and married, are more likely to “freak out” and dump their investment portfolio during a downturn, according to a Massachusetts Institute of Technology (MIT) study.

That’s me, I thought, as I read the study. I fit the three M’s (3M): male, middle-aged, and married.

Dumping investment portfolios in panic

The MIT researchers discovered the 3M attributes as they were poring over a novel dataset of 653,000 brokerage accounts across 300,000 households in the U.S.

They were trying to build a model to study panic selling in the marketplace in response to sharp economic downturns, with panic selling described as “freak out” moments when investors sell off a large portion of their riskier assets during the market downturn.

According to the report, 3M investors do this despite their financial advisors advising them “to stay calm and weather any passing financial storm in their portfolios.”

A recent example of a downturn here in Singapore is between February and March of 2020 when the Straits Times Industrial Index lost a third of its value in the space of four weeks. Based on the MIT findings, it would be logical to surmise that many 3Ms dumped their investment portfolios in panic during this time.

For 3M investors that dumped their Singapore stocks early last year, they would have missed the rapid recovery resulting in the market roaring back to pre-pandemic levels if they had continued staying on the sidelines.

3Ms (Male Middle-Aged, Married) and why they freak out

In some ways, panic selling could be reasonable because it is a recognized way to cut losses during a crisis.

Unfortunately, the same investors that panic sell tend to wait too long to get back into the market and reinvest, causing them to miss chances to recoup the losses sustained during panic selling, or to benefit from future improvements in the market.

The MIT paper doesn’t delve into why us 3Ms seem prone to panic selling, but being part of this group, I would like to offer some possible reasons:

Overconfidence bias

This is where a persons’ confidence in their judgement is greater than the objective accuracy of their judgement.

Daniel Kahneman, who won the Nobel Prize in Economics, in his book Thinking Fast and Slow described overconfidence bias as the kind of optimism that leads governments to believe that wars are quickly winnable and capital projects will come in on budget despite statistics predicting exactly the opposite.

What is interesting is that the 3Ms actually seem to freak out more when they believe they have a good or excellent knowledge in investing. The researchers found that “those who declared themselves to have no investment experience, are less likely to panic sell or freak out.”

A close personal friend, who is a General Manager of a medical device company, panicked during the Global Financial Crisis in 2007 and sold his entire retirement portfolio of blue-chip stocks, taking a 40 per cent haircut to his personal wealth. He has since remained on the investment sidelines during the last decade, which was one of the longest periods of wealth creation in modern investment history.

It would appear that some knowledge can be a dangerous thing.

When the market is roaring, the 3Ms could be attributing their investment gains to their investing ability, but this confidence rapidly deteriorates during a downturn, seeing 3Ms panic selling to cut their losses.


The website PsychCentral writes that middle aged men tend to suffer from high levels of male anxiety – also known as “manxiety.” This is an evolving area of research because the 3M group are difficult to study.

Gender stereotypes often result in men not being willing to open up about their anxiety, preferring instead to distract themselves or use alcohol and other substances to get some relief.

Between career, family responsibilities, aging parents and nurturing spousal relationships the 3Ms have plenty on their mind.

With so much going on, it could well be that the 3Ms are happy to ride the market while it is going up, but choose to pull the eject button when the markets tumble, because they do not need another source of stress in their lives.

And when things go wrong — denial

Denying any overconfidence bias. Denying any manxiety. One thing the 3Ms are supremely good at is denial.

If you were to ask them, it is very likely that the 3Ms would deny that they freaked out and panic sold during any market downturn, preferring to lick their wounds of incurred losses in private, rather than to admit it to someone else.

That is the subtle genius of the MIT data set. The objective data transcends the self-reporting bias that plagues a lot of research about investment behavior, especially amongst the 3Ms.

Embracing my "manxiety”

Middle age is the season of life when one comes to terms with mortality and who they are.

As if growing old is not difficult enough. My enlarging prostate means that I rarely make it through a night of sleep without having my sleep disrupted by a trip to the bathroom. The receding hairline has me combing my remaining wisps of hair more strategically to cover the under-turfed expanse.

As I age, I am losing the fight with calories - as reflected in my expanding girth. I often limp into work on Monday morning as penance for my shenanigans as a weekend warrior, trying to keep up physically with my two teenage sons who are both taller and fitter than I am.

Then, there is also perennial existential question on what more I could have achieved, now that half my life is over. The magic bullet to solve this existential crisis seems always to end with me putting down the first payment for a very fast car, something which I have been able to resist thus far – but just barely.

To add insult to injury, I find out that I am more likely to freak out and panic sell my assets during a market downturn!

From a personal finance point of view, I am heavily weighted in equities and bonds, preferring to avoid debt where possible. I do have several high-risk investments in my portfolio, which attract additional attention from me when the markets are in tumult.

Although I imagine myself as an investor with nerves of steel, perhaps in reality, I am nothing more than an anxious spider?

On the topic of panic selling, Sun Tzu writes that “if you know the enemy and know yourself, you need not fear the result of a hundred battles.”

I am glad to be aware of this potential blind spot, in preparation for the next market downturn when my 3M instincts are screaming “sell, sell, sell”.

My resolution for the coming 2022 year is to embrace how the three ‘Ms’ have defined me as an individual, even if it includes living with some manxiety.

In addition, I have renewed my resolve to stop denying my failings and overconfidence bias, vowing to write and talk more frequently about my many mistakes in the coming year.

I cannot change the past and will instead focus on what I can do better for the remaining years I have left.

Top photo by Andrew Koay.