401(k) trading jumps as market volatility continues, according to Alight Solutions

Lincolnshire, Ill. February 8, 2018
As investment markets look to stabilize, new data from Alight Solutions, a leader in technology-enabled health, wealth, HR and finance solutions, suggests 401(k) investors have been trading at well above normal levels in recent days.

According to data from the Alight Solutions 401(k) Index™ trading on Monday, February 5 was almost 12 times the normal level. The last time Alight saw this level of trading was August 2011, coinciding with the last time the S&P 500 saw its biggest single day drop.

“We typically see a spike in trading activity when the market corrects, and Monday was no exception,” explained Rob Austin, head of Research at Alight Solutions. “Many 401(k) investors who spent the weekend hearing about how the stock market posted its worst week in years were quick to make changes and sell some of their equities.”

Alight’s data shows that since Friday, February 2, 401(k) investors have largely been moving away from equities and into fixed income funds.

Other key findings:
  • Friday, February 2. As the S&P 500 dropped by a little more than 2 percent for the day, net trading activity was 0.058 percent of balances, close to three times the trading activity of a typical day.
  • Monday, February 5. The S&P 500 decreased by over 4 percent—its biggest single day drop since August 2011. Likewise, 401(k) trading activity reached its highest level since August 2011 with 0.176 percent of balances trading.
  • Tuesday, February 6. The S&P 500 posted a gain of 1.74 percent. The net trading activity was 0.068 percent of balances—over four times the trading activity of a typical day.
  • Wednesday, February 7. As the S&P 500 fell by one-half percent for the day, net trading activity was 0.032 percent of balances—twice the trading activity of a typical day. Unlike the prior four trading days, participants traded into equities.
On an “average” day, 401(k) investors typically have net trading activity of 0.015% of balances.

 “Historically, we have seen investors make quick decisions in response to market movement, which may have resulted in them missing the “upside” as markets right themselves,” said Austin “Savers should consider keeping an eye toward their long-term investing strategy and act accordingly.” 

The Alight Solutions 401(k) Index™ tracks the market confidence and investment activity of nearly 2 million 401(k) investors with over $200 billion in collective assets. Find out more at ideas.alight.com/401k-index.


About Alight Solutions

With an unwavering belief that a company’s success starts with its people, Alight Solutions is a leading cloud-based provider of integrated digital human capital and business solutions. Leveraging proprietary AI and data analytics, Alight optimizes business process as a service (BPaaS) to deliver superior outcomes for employees and employers across a comprehensive portfolio of services. Alight allows employees to enrich their health, wealth and work while enabling global organizations to achieve a high-performance culture. Alight’s 15,000 dedicated colleagues serve more than 30 million employees and family members. Learn how Alight helps organizations of all sizes, including over 70% of the Fortune 100 at alight.com.


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