Panicked Selling? Not from where we sit. In fact, it’s the exact opposite.

One of my favorite finance journalists and authors is Jason Zweig of The Wall Street Journal. He writes a weekly column called “The Intelligent Investor.” If you don’t read it regularly, I highly recommend you do. 

His most recent column written on February 27, titled “The Pros Have to Sell Stocks Now. You Don’t.” puts forward a unique, and somewhat unexpected, perspective informed by a 2002 study by two professors. Their research showed:  

  • Professional investors sell more (and faster) than individuals do when there’s a large market drop 
  • Stocks that are widely held by large investors show greater trading volumes during sharp market drops; and  
  • Stocks sold by big investors during these down days tend to outperform the market over the ensuing six months. (But remember, past performance is not a predictor of future performance). 

To sum it up, he writes that “Patience is a luxury that individuals can afford.” 

So that got us to thinking. What does our data show over the past few days of hard market selloffs? Does it align with what Mr. Zweig suggests? How are M1 investors approaching the recent down days in the market? Are they remaining patient? Or not? 

We examined investment contributions (not including account transfers) and withdrawals (not including transfers) over the past three days (Monday February 25 – Wednesday February 27) and compared them to the average of the past four Monday – Wednesday periods, excluding the three days periods that included the George Washington’s Birthday and Martin Luther King Day holidays when the markets were closed. Here’s what we found: 

Feb. 25-27Avg. Mon-Wed
(prior four weeks)
% Change
Contributions $18.6 million $13.9 million 33.8% 
(Withdrawals) ($3.7 million) ($2.8 million) 32.1% 
Net Contributions / (Withdrawals) $14.9 million $11.1 million 34.2% 

Contribution increases outpaced the withdrawal increases, resulting in an overall net contribution increase of 34% over the recent time period versus the average. And when we looked at Reddit, we saw several people echoing this approach during this market drop: 

“Made me wish I had more savings I could dump into my pies.” 


“It teaches me to stay the course. It means not to sell like the trader, and not to buy as the OP because they are both market timing.”


“I’ll be dipping into my 18 months of emergency savings to deploy capital into my M1 taxable and Vanguard taxable account. I see this as a buying opportunity but I’m aware not to blow my wad so quickly.” 


“I didn’t change a thing. Set and forget, weekly deposits.” 


It appears that M1 investors are exhibiting patience in the aggregate. 

Thanks Jason Zweig for an interesting point of view. 

Do you have some favorite journalists or bloggers you follow? Please share! 

Check the background of M1 Finance LLC on FINRA's BrokerCheck

By using this website, you accept our Terms of Use and Privacy Policy and acknowledge receipt of all disclosures in our Disclosure Library. All agreements are available in our Agreement Library. M1 relies on information from various sources believed to be reliable, including clients and third parties, but cannot guarantee the accuracy and completeness of that information.

M1 refers to M1 Holdings Inc., and its affiliates. M1 Holdings is a technology company offering a range of financial products and services through its wholly-owned, separate but affiliated operating subsidiaries, M1 Finance LLC and M1 Spend LLC.

M1 Plus is an annual membership that confers benefits for products and services offered by M1 Finance LLC and M1 Spend LLC.

All investing involves risk, including the risk of losing the money you invest. Past performance does not guarantee future performance. Using M1 Borrow’s margin account can add to these risks, and you should learn more before borrowing. Nothing in this informational site is an offer, solicitation of an offer, or advice to buy or sell any security and you are encouraged to consult your personal investment, legal, or tax advisors.

Brokerage products and services are not FDIC insured, no bank guarantee, and may lose value. Brokerage products and services are offered by M1 Finance LLC, an SEC registered broker-dealer, Member FINRA / SIPC.

M1 Spend checking accounts furnished by Lincoln Savings Bank, Member FDIC. M1 Visa® Debit Card is issued by Lincoln Savings Bank, Member FDIC.

Credit Card not available for US Territory Residents. Review Cardholder Agreement and Rewards Terms for important information about the Owner’s Rewards Card by M1. The Owner’s Rewards Card by M1 is Powered by Deserve and issued by Celtic Bank, a Utah-Chartered Industrial Bank, Member FDIC.

All product and company names are trademarks™ or registered® trademarks of their respective holders. Use of them does not imply any affiliation with or endorsement by them.

App Store is a service mark of Apple Inc. Google Play and the Google Play logo are trademarks of Google LLC.

200 N LaSalle St., Ste. 800 Chicago, IL 60601

© Copyright 2021 M1 Holdings Inc.