Fidelity Analysis Shows Benefit of Long-Term Investing View

401(k) investors who stuck with equity allocations after the 2008 financial crisis fared better than those who didn’t.

The recent market volatility drove a record number of people to seek guidance from Fidelity Investments about the impact of market changes on their account balance and steps they should consider.

In early January, Fidelity responded to six million customer contacts in a single day, one of the busiest days on record.

Trying to move in and out of the market can hurt an investor’s long-term retirement savings, Fidelity says. The firm examined 401(k) investor behavior between 2008 and 2015, and compared people who continued to invest in equities during this period with those who dropped to 0% equity in their 401(k). Assuming the investors started with a balance of $10,000, the analysis showed that investors who went to zero equities saw their 401(k) balances grow by 74% to $17,360, while those who kept a portion of stocks in their 401(k) saw their balance grow almost 150% to $24,800.

“Today’s retirement savers have constant access to detailed market and financial data, which can be unnerving during periods of economic uncertainty and make many investors feel like they have to take action,” says Doug Fisher, senior vice president, Fidelity Investments. “While we understand that it may be tempting to react to recent market volatility, Fidelity’s guidance is to focus on a sound, long-term retirement savings plan. The market will have many peaks and valleys, so having a plan and staying on course puts you in the best position to achieve your financial goals.”

NEXT: 401(k) contributions, managed account use increased year over year

According to Fidelity’s analysis, 401(k) and IRA account balances increased in Q4 2015, but are down year over year. After decreasing in Q3 2015 due to market volatility ($84,400), average 401(k) account balances recovered in Q4 2015 ($87,900), but are still below the averages from Q4 2014 ($91,300).

Both 401(k) and IRA account holders continued to contribute to their retirement savings accounts. The average IRA contribution was $1,500 in Q4 2015, up from $1,260 in Q3 but down from $1,660 in Q4 2014. The average total 401(k) contribution, which includes both employee and employer contributions, was $2,540 in Q4 2015, down slightly from $2,610 in Q3 but up from $2,440 in Q4 2014. During 2015, employers contributed an average of $3,610 to 401(k) accounts through profit sharing or company match.

An increasing percentage of retirement assets are in target-date funds or managed accounts. As of the end of Q4 2015, 25% of total 401(k) assets on Fidelity’s platform were held in target-date funds, and two-thirds (67%) of Fidelity 401(k) account holders had at least some of their savings in a target-date fund. Among Millennials, 63% had all of their retirement assets in a target-date fund at the end of Q4.

In addition, the use of Fidelity’s professionally-managed account portfolios continued to increase in 2015, growing by 19% since 2014.