Default fears drove 401(k) investors from stocks

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Workers with 401(k) accounts, fearing another drop in account values similar to 2008, shifted investments from stocks to less volatile bond funds in the days leading up to Tuesday’s debt ceiling vote.

Aon Hewitt, which tracks the accounts of 4.7 million workers, said the volume of money moving from stocks to fixed-income funds since July 25 was the third-highest level since it began tracking data in 1997.

Trading volume on Thursday exceeded $900 million. On a typical day, trading volume in the 401(k) accounts Hewitt tracks is around $300 million to $400 million.

Volume remained high on Monday, reaching $862 million as Congress moved closer to reaching a compromise.

Last week, 95 percent of the trading volume involved moving money from stocks to fixed-income investments, primarily stable value funds.