Majority of Vanguard investors holding steady during market volatility

March 27, 2020

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More than 90% of Vanguard U.S. investors are "staying the course" and not trading in response to recent market declines, according to research from Vanguard.

However, among those clients who are trading, there are some modest differences.

The typical trader is buying equities on the dips, but older, wealthier traders are moving modestly to fixed income. On balance, we believe these levels of trading indicate that the vast majority of investors are maintaining a long-term perspective despite the market turmoil. This is particularly true of investors who only have a Vanguard defined contribution (DC) account.

Between February 19 and March 20, households with only a Vanguard DC account had the lowest incidence of trading, at 2.5%. IRA and taxable-only households had the highest incidence, with one-quarter of them trading.

Vanguard U.S. household trading has varied significantly by investor type

Vanguard Trade Image

Notes: Data is from February 3 through March 20, 2020. Vanguard households total 8.5 million, of which 42% hold only DC plans, 27% hold only IRAs, 11% hold only taxable accounts, 5% hold DC crossover accounts, and 15% hold only IRA and taxable accounts. Source: Vanguard 2020.

On balance, we believe these levels of trading indicate that the vast majority of investors are maintaining a long-term perspective despite the market turmoil. To learn more, read the Vanguard paper U.S. Household Trading: Coronavirus Market Volatility.

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Notes:

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