Traders Union research: Investors without emergency savings panic sell more often
Investors who enter the market without an emergency fund are much more likely to sell assets under pressure. A new Traders Union study shows that reserve savings affect not only personal financial stability, but also real investment behavior.
In the report “Should You Invest Without an Emergency Fund?”, Traders Union analysts identified a clear link between having emergency savings and investor decisions. The study surveyed 1,214 retail investors from different regions. Around 45% of respondents had an emergency fund covering at least three months, while many others had minimal or no reserves.
According to the study, 52% of investors without emergency savings sold assets in panic during market declines. Among financially prepared investors, this figure was much lower — 27%. The difference is also visible in forced selling: 41% of respondents without reserves sold assets multiple times due to urgent cash needs, compared to only 12% among investors with an emergency fund.
The cost of investing without savings
The study shows that lack of liquidity often turns market volatility into a personal financial problem. When an investor has no cash reserves, a market drawdown becomes not a temporary loss “on paper,” but a direct threat to the budget.
This affects behavior. Investors without an emergency fund are more likely to sell assets during stressful periods, exit positions too early, and use investment capital for urgent expenses. As a result, they may lock in losses instead of waiting for the market to recover.
Traders Union analysts also found differences in asset selection. Investors without an emergency fund more often invest in volatile instruments: 42% invested in cryptocurrencies, and 27% in Forex or CFDs. Investors with reserve savings had more balanced portfolios: they more often chose ETFs and mutual funds.
Savings change the investment horizon
An emergency fund also affects how long people are willing to stay in the market. Among investors without reserves, only 15% reported an investment horizon of more than three years. At the same time, 34% focused on a period of less than six months.
Among financially prepared investors, the picture was different. In this group, 31% had a horizon of more than three years, and only 14% focused on short-term periods. This shows that an emergency fund helps investors handle volatility more calmly and avoid rushed decisions.
The study also revealed a gap between financial awareness and actual behavior. Although 58% of respondents said that emergency savings should be built first, many still enter the market with a limited emergency fund or without one at all.
Traders Union analysts conclude that an emergency fund is not only protection against unexpected expenses. It also helps investors make calmer decisions, avoid forced selling, and stay in the market longer.
Earlier, Traders Union also published research on how traders use AI.
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