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I recently purchased a red plum tree and it has started losing leaves rapidly and little branches falling off. I planted exactly as you advise. Could over watering be causing this. The leaves also have some small holes on them.

Overwatering (drowning) a plant will indeed cause rapid leaf loss. You want to make sure it doesn’t get too dry but keeping it constantly wet drowns the roots and it will then lose leaves.  Also check to make sure you didn’t bury the stem any deeper than it was in the pot or ball it came in and also that you haven’t piled mulch up around the trunk.  Get down there and brush back any mulch or soil until you find the original soil that the plant came in and keep it that way.  Piling mulch or dirt against the bark of the stem will also cause the tree to lose leaves.  The tiny holes are probably from insects which fruit trees and ornamental fruit trees are attractive to.

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