On a percentage basis, October 1987 remains the worst month ever for withdrawals. Last month, the market rallied after a dismal March, with the Wilshire 5000 index, which includes most U.S. companies, rising 8.1 percent for its biggest gain in nearly 10 years. The pattern is typical in bear markets. Investment Company Institute spokesman John Collins said selling remains small relative to total fund assets because research shows that most investors are saving for retirement. The average mutual-fund investor owns four funds and is 44 years old, meaning he or she has about 20 years until retirement.
Most studies suggest that stocks offer the strongest returns over that many years.
The average investor also purchased a mutual fund for the first time in 1990, and therefore has experienced more than a decade of market ups and downs. Overall, though, the 1990s had unprecedented returns for stocks. While some types of stock funds saw heavy investor interest, others remained pariahs. Funds that focus on small companies attracted many new investors, TrimTabs said. But investors remain wary of funds that invest in technology companies, he said.