The Aon Hewitt 401(k) Index tracks trading activity across 1.3 million 401(k) accounts representing approximately $160 billion of, ahem, “long-term” investments. What did these “long-term” investors do during recent market volatility?

Preceding the volatility average daily trading volumes for July and August were in line with normal levels.

On Fri 8/21/15 when the S&P 500 sold off by 3.2% trading volumes were TWICE normal levels. Fund flows were out of equities and into fixed income.

On Mon 8/24/15 when the S&P 500 sold off another 4% trading volumes were SEVEN TIMES normal levels. Fund slows were out of equities and into fixed income.

Here’s a fantastic chart detailing trading volumes relative to the value of the DJIA.

On all trading days thereafter the Aon Hewitt 401(k) index showed normalized trading volumes.

How to interpret the index data? “Long-term”, ahem, “investors” sold into a down market and sat on the sidelines missing the recovery. Way to go “long-term investors!”

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