Trading in 401 (k) accounts surged Monday, hitting levels not 📖seen in more than four years, amid the sharp downturn iꩵn the U.S. stock market.

Trading activity in the retirement savings plans—even with glitches experienced by major trading platforms that morning—was more than eight times the amount that occur🤪s on an average day, according to the Alight Solutions 401 (k) Index. It was the biggest single day of trading activity since March 2020, when sentiment was roiled by the uncertainty of the onset of the Covid-19 pandemic.

To put the magnitude of the volume further in perspective, net trading activity on Aug. 5 alone equalled 0.08% of the plan balances, which com🍌pares with the 0.09% figure for the entire month of July, Alight 🍸said.

"We have seen trading activity spike when the market suddenly drops. Monday, August 5 was no exception,” wrote Rob Austin, Head of Thought Leadership at Alight, in commentary, adding that trading picks up when markets fall by 2% or more.

On Monday, the Nasdaq Composite shed 3.4%, while the S&P 500 and Dow Jones Industrial Average fell 3% and 2.6%, respectively. 澳洲幸运5官方开奖结果体彩网:The selloff, sparked in part by growing investorꦑ concerns about the health of the U.S. economy, represented the biggest single-session point declines f🦄or each of the major indexes since Sept. 13, 2022.

Most 401 (k) Trades Moved Money to Safer Assets

Advisors recommend investors 澳洲幸运5官方开奖结果体彩网:not to panic-sell during turbulent markets, though rebalancing portfolios and buying the dip are 澳洲幸运5官方开奖结果体彩网:strategies to weather 🌊th🌠e volatility. And that's exactly what some of the investors did.

Many investors shifted their funds from stocks towards safer, less-volatile a🃏ssets. Alight found that nearly all net inflows were toward stable value funds (61ꦺ%), bonds (20%), and money market funds (18%). At the same time, there was a flow out of stocks: large cap U.S. equity (60%) and target date-funds (13%) had the greatest outflows.

Some Retail Investors 'Buying the Dip'

While many investors were concerned about the safety of their retirement funds, some retail investors also viewed Monday’s selloff as an opportunity to 'buy the dip.' 

Since last Thursday, the average daily inflows from retail investors was worth $1.8 billꦬion compared to $0.9 billion in the previous 21 trading sessions, according to data from Vanda Research.

AI chipmaker Nvidia (NVDA), which has lost 15% of its value over the past week after powering the market higher for much of the year, was the biggest winner in terms of flows, with over $1.5 billion of net buying in the stock. SPDR S&P 500 Trust (SPY), Advanced Micro Devices (AMD) and Intel Corp. (INTC) were other beneficiaries.