FRUSTRATING DOWNGRADE: Average investors found the U.S. debt rating downgrade by Standard & Poor's a frustrating development that fed into fear and a flight from stocks. The sell-off pushed the Dow Jones industrial average below 11,000 for the first time since November.
WORRIED INVESTORS: "When your credit gets downgraded like that, it's sort of emasculating to the national psyche. It affects people's moods," says Charles Sizemore, a Dallas adviser.
Transaction volume in 401(k) and other Vanguard client accounts was heavy Monday as clients took some money off the table and others saw the market decline as a buying opportunity. Brokerage firm E-Trade Financial reported a record number of trades were placed Monday by investors using mobile devices.
CAUTIONARY ADVICE: Investors especially should avoid jumping online, going into their accounts and getting out with the push of a button. "Investors would be very well-suited, regardless of what's going on, to wait a day or two" says Adam Bold, founder of The Mutual Fund Store, a manager of $6.5 billion based in Overland Park, Kan. "It's best not to make dramatic changes on days when we have high volatility," he says.