Data from the Aon Hewitt 401(k) Index, which tracks the investment activity of 1.5 million 401(k) investors, shows trading in 401(k) accounts spiked with recent market swings.

On Friday August 21, according to Aon Hewitt, trading activity among retirement plan participants was twice the normal level. Activity on the following Monday was seven times the norm, making for “one of the highest trading days on record,” Aon Hewitt notes.

Trading volumes returned to more normal levels Tuesday, the index shows, as markets rebounded. It seems pretty clear that a drop in equity asset values spooked a sizable minority of 401(k) investors, Aon Hewitt says. Preceding the market drop on the 21st, there had been no above normal trading in July or August.

It won’t surprise industry practitioners that 401(k) balance movement measured by Aon Hewitt was chiefly out of equities and into fixed income. Put another way, the trades were largely ill-timed and represented participants selling their equity holdings at depressed prices. Fortunately, it was only about 0.17% of net 401(k) plan balances that traded on Monday the 24th, but Rob Austin, director of Retirement Research at Aon Hewitt, says it’s a shame to see even a small group of people reacting poorly to market headlines.

“This summer, we’ve seen significant passivity on the part of 401(k) investors, with extremely low trading volume in the months leading up to Friday’s downturn,” Austin says. “To see investor’s do a complete about-face is concerning.”

It’s all a reflection of advisers’ struggle to instill a long-term mindset in some clients. One message that may help: those who moved money out of equities Friday and Monday and failed to reinvest quickly missed the strong rebound of the following days. Some didn’t even have the option to reinvest in equities as quickly as they would have liked, given that at least one major 401(k) provider was forced to suspend trading due to problems with pricing of mutual fund families.

NEXT: Looking at the impact of market dips on retirement income

As observed by Empower Retirement President Ed Murphy, investors got a fresh taste during the week of the market’s irrepressible capacity to surprise and confuse even the shrewdest stakeholders.

By week’s end, little consensus had emerged in trade media as to whether markets had experienced a flash crash, or if they had betrayed a truer and more sober valuation of global economic growth that we will approach again in coming weeks or months. Murphy suggest “a litany of factors is in play,” including the world oil glut, debt concerns in Chinese and Greek markets, and speculation surrounding Federal Reserve action on interest rates. 

“With each passing tick of the Dow and each frightening headline, the temptation rises for retirement savers to make emotional decisions based on short-term market movements,” Murphy says. “There’s no question that we are living in interesting times.”

There’s more than a small chance that markets could swing wildly again by the time this story is read, but Murphy says that doesn’t matter so much. He echoes the theme of the week for calming concerned retirement investors exposed to vibrating markets: “Nobody can tell you with any degree of certainty what’s going to happen next.”

“Considering all of the factors that influence the global economy, it’s probably easier to predict the weather than the movements in the markets,” Murphy says.

He concludes that presenting the impact of market dips in terms of projected retirement income, rather than as a function of top-line portfolio value, may help investors create and stick to better strategies. The important point is to help participants realize the key role time plays in their portfolio—easing the pain of short-term ups and downs. Online calculators should be helpful in making the case, as a 5% or even 10% market drop today will not cause the projection to fall sharply, if at all.

“The effect of even a large market move on your monthly paycheck in retirement is going to seem insignificant,” Murphy notes. “If one develops that monthly retirement income mentality it’s a great way to diminish any fears and will help prevent making emotional investing decisions.”