How do mutual fund shareholders respond to stock market volatility?
Historically, mutual fund investors have reacted calmly and without panic in response to stock market volatility. The Investment Company Institute has conducted a number of studies that show fund investors have never responded to sharp market breaks by redeeming shares en masse. Fund investors have an adequate understanding of investment risks and tend to take a long-term approach to their investments. While fund shareholders are not insensitive to long-term declines in stock prices, their response has been measured and gradual. There is no evidence that this long-established pattern of behavior will change.
