NEW YORK — When fear was pumping through the market this summer, most retirement savers kept their cool. This is according to Fidelity, which saw how individual investors generally behaved by looking at its 13.5 million 401(k) and 6 million IRA accounts, as stocks tumbled in the third quarter.
The Standard & Poor’s 500 index sank more than 10 percent in one week in August, driving the index to its worst quarter in four years.
At that time, only 4.9 percent of Fidelity’s 401(k) account holders made changes to investments. Workers also diverted more of their paychecks into their 401(k) accounts than they did a year earlier: an average of 8.2 percent of their pay last quarter, up from 8 percent.
“During volatility, many times the best course of action is none at all,” Jeanne Thompson, vice president at Fidelity Investments, said. That’s because 401(k) accounts and IRAs are long-term savings, and compound interest works best when investments are given time. For investors who have had a 401(k) account at Fidelity for the past 10 years, just about half of the growth has come from investment gains; half came from contributions.