Hi Cosmo,
I don't think I can answer that question with any degree of authority. I can say that most of the retail holders of long term investments are in a panic and dispair mode, but are frozen and at a loss re what to do. They may do some selling if we go to lower lows. At the moment, I think most still hold out the hope of a quick move up in the market to erase all loses or a similar scenerio to 2000's decline and eventually recoup, but they are not the one's responsible for the volatility in the market.
There's a great deal of denial about the depth of the seriousness of our economic instability. Most people are very uninformed and assume that the gilded years will continue forever. If not, they wouldn't have been living on credit and spending like a drunken sailors. Most of those with more information choose to ignore what they consider the "doom-and-gloom" outlooks -- similar to Larry Kudlow, who sees Goldilocks around every corner.
I suspect the volatility is partly the result of managers, hedge funds, big player, who didn't anticipate that the market would fall as much as it has and have been catching falling knives all the way down.
I'm sure others on this board can provide more data about the volatility, but I can't determine that from a psychological point of view.
AI
