NEW YORK -- George Johnides had planned to start off 2001 by socking away more money in his 401(k) retirement account. That was before he noticed that the value of the mutual funds in the account is down about 11 percent.
He's decided to stay put for now.
"I'm not doing a thing. I have always been told it's best to lay low and to not to jump ship," said Johnides, 40, who helps assemble Toyota Camrys and Siennas in Georgetown, Ky.
Johnides and his co-workers are instead asking questions, wondering when the stock market and their portfolios will recover.
"They are asking, `Is this just my account that's doing this?"' said Shane Shepherd, human resources specialist at Toyota Motor Manufacturing Kentucky Inc.
That concern is shared by many 401(k) participants, said Peter J. Smail, president of Fidelity Employer Services Company, the country's largest provider of 401(k) plans, including Toyota's.
"They are asking: What is the market doing? When will the volatility be over? What should I be doing? What are other people doing?" Smail said.
As for what people are doing, they are mostly contributing to their 401(k) accounts at the same rate as they did before Wall Street's volatility began, Smail and others said.
Already, with $1.7 trillion invested primarily in mutual funds, 401(k) investors have helped prop up the turbulent stock market because they invest regularly - from each paycheck - and for the long term, said Don Cassidy, senior research analyst for Lipper Inc., a Summit, N.J. firm that tracks the mutual fund industry.
And, "they are the last to sell," he said.
If these investors had decided to sell, the money that investors pulled out of mutual funds during March would have been bigger than the record $15 billion.
"A 401(k) investor tends to be more long-term in outlook and much less active" when it comes to trading, Cassidy said.
However, it's less clear if 401(k) participants will bump up their contributions in 2001, said Smail, who earlier this year oversaw a Fidelity survey in which 41 percent of the 486 respondents said they planned to do just that.
"It's too soon to tell. Typically, contributions do go up every year as people get pay raises," Smail said. "We've been very encouraged by what we have seen of participant behavior. ... People seem to be sticking to their investment plan."
Beginning this year, Toyota's Kentucky plant increased the amount its employees are allowed to contribute to their 401(k) accounts to 15 percent from 12 percent.
"There were quite a few people who jumped right in even with the 'bad' market conditions," Shepherd said.
But he said just as many of the 8,500 employees there, like Johnides, are putting off at least temporarily a change in the amount of money they invest.
"I was going to do the 15 percent, but right now I am thinking, 'Why should I?"' Johnides said.
Meanwhile, some of these investors have decided to deal with the market's volatility by switching to safer investments, such as bond funds, and shying away from riskier stock funds, said Lori Shapiro, principal at William M. Mercer Inc., an employee benefits consulting firm.
But those cases are few, said Shapiro. She also said that although 401(k) investors might be wary of making bigger commitments to the market, they should be credited for sticking with it.
"We are not seeing participants reacting hastily to the market's downturn," Shapiro said.
"Participants are trying to stay the steady course."