Wall Street pros aren’t the only investors feeling the heat in the current market plunge

The Investment Company Institute said Wednesday that a net $34.8 billion flowed out of long-term mutual funds during the week ended Dec. 12. That is up from $4.4 billion that was pulled out the prior week and $13.3 billion pulled out the last week of November.

But ICI chief economist Sean Collins said, “Consistent with their behavior over seven decades of history, mutual fund investors are reacting moderately to market volatility, and for the most part are maintaining their investment plans and asset allocations.”

That is what advisors are telling clients to do. “Our advice is to stay the course,” West told CNBC. “An investor may guess right when to get in/out of the market through a move to cash. However, what we see is that they spend so much time worrying about when to get back in/out that stress and anxiety increases significantly.”

A prolonged downturn may be more of a concern to those on the cusp of retirement, when savings are converted slowly to income to cover living expenses. Total U.S. retirement assets were $29.2 trillion as of the end of September, according to the ICI, up 2.8 percent from the end of June. Some $9.5 trillion of that was in Individual Retirement Accounts, with $2.6 trillion invested in stocks.

Pessimism actually increased in the American Association of Individual Investors’ most recent sentiment survey, which measured the week ending Wednesday. About 24.9 percent of investors said they believed stock prices would rise over the next six months. That’s up 4 percentage points from the prior week.

To be sure, optimism has been running below the historical average for 13 straight weeks, and readings below 28 percent imply an unusually low level of optimism.

Before the latest bout of stock market volatility and downward momentum, the number of 401(k) millionaires had grown 40 percent in the year ending in September and women investors had reached record contribution rates, according to a quarterly survey by Fidelity Investments. The average 401(k) balance in the third quarter reached an all-time high of $106,500, Fidelity said. The previous record was set in the fourth quarter 2017.

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