Participant Trading Spikes Amid Market Volatility

Those admonitions to “stay the course” notwithstanding, participant trading has surged in recent days, along with the markets’ volatility.

Indeed, data from the Aon Hewitt 401(k) Index shows trading activity in 401(k) plans was markedly higher on Friday, Aug. 21, 2015 and Monday, Aug. 24, 2015. Friday’s trading activity was twice the normal level, while activity on Monday was seven times the normal level — the third highest day of trading since 2008.

The trading movement on Friday and Monday was out of equities and into fixed income.

However, the Aon Hewitt 401(k) Index — which tracks the 401(k) trading activities of nearly 1.3 million participants and some $160 billion in collective assets — has seen activity return to more “normal” levels since then.

Preceding Friday’s market drop, the Aon Hewitt 401(k) Index showed no days of above normal trading in July or the beginning of August.

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