Retirement Savers Fled Equities in Market Selloff

The Biggest Retirement Mistake People Make

Retirement savers violated a cardinal rule of investing this past week: they sold into a plunging market.

After racing into equities in January, they did an about-face as markets fell on Friday Feb. 2. Savers moved into money and fixed-income funds, trading at close to three times the norm, according to Alight Solutions’ 401(k) Index.

On Monday, when the Dow Jones Industrial Average plummeted 1,175 points, they repeated the pattern, this time trading at 12 times the typical pace. The next day, as the market recovered some losses, 401(k) savers kept selling stocks, trading at a rate of four times the usual.

The last time trading reached 12 times the norm was on Aug. 8, 2011, when markets dropped on concerns about a global debt crisis.

The index tracks daily moves of almost 2 million 401(k) participants with combined assets of more than $200 billion.

— With assistance by Heather Perlberg

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