(NewsNation) — Recent volatility in the stock market has spooked many retirement savers, but experts say it’s important to stay calm and avoid rash decisions.

Trading activity in 401(k)s surged Monday, spiking to more than eight times the average daily volume, according to Alight Solutions 401(k) index, which tracks more than two million 401(k) participant accounts.

It was the biggest day of 401(k) trading activity since March 2020, when pandemic uncertainty sent markets haywire.

“Throughout the 25-year history of the Alight Solutions 401(k) Index, we have seen trading activity spike when the market suddenly drops. Monday, August 5 was no exception,” Rob Austin, Alight’s head of thought leadership, said in a statement to NewsNation.

Many of those investors fled to safer assets, shifting money out of stocks and into stable value, bond funds and money market accounts, Austin said.

The nervous reaction came after Wall Street had its worst trading day since 2022, with the Dow Jones Industrial Average falling more than 1,000 points — about 2.6%. That drop came after a weak jobs report and a stock sell-off in Japan reignited U.S. recession fears.

However, since Monday, the Dow has clawed back some of its losses, now just 1.5% down since last Friday. The bounce back underscores what many financial experts have been saying all week: Don’t panic.

Have 401(k) savers been affected by market turbulence?

Millions of 401(k) savers have seen their account balances drop over the past week but financial experts are urging patience after Monday’s dip.

“Don’t panic if you’re a long-term investor,” Caleb Silver, editor-in-chief of Investopedia told NewsNation’s Elizabeth Vargas on Monday. “This is the price you pay for investing; volatility like this comes along every once in a while.”

Bankrate’s chief financial analyst Greg McBride also called for calm after Monday’s sell-off.

“Investing for the long-term means embracing these periods of turbulence, either to buy more or to just shrug it off and maintain the long-term perspective,” he said in an analysis.

For those closer to retirement, however, it may be worth reviewing how your portfolio is balanced. In general, investors should gradually reduce their risk as they get older. That means having more money in stocks early on and then transitioning to safer assets such as bonds when retirement approaches.

For many 401(k) holders invested in target date funds, the asset mix automatically becomes more conservative over time.

Can 401(k) contributions grow in a volatile market?

Depending on when you plan to retire, a downswing in the market can be a great opportunity to invest at a discount.

“If you have a long-term horizon, you’re going to have an opportunity to buy stocks, index funds and ETFs at much cheaper prices,” Silver said.

Historically, stock market downturns are often followed by a period of positive gains. In fact, some of Wall Street’s best days came shortly after their worst.

A 2015 study found that consistent 401(k) participants saw their account balances increase by 86% from 2007 through 2013, a period that included the Great Recession.

Investment company BlackRock put it another way: If a person invested $100,000 in the S&P 500 Index from March 2000 to February 2020, that portfolio would be worth more than double the same portfolio that missed the top 10 performing days.

How do you keep a long-term view during short-term volatility?

Seeing your hard-earned nest egg shrink can be stressful and with the 2024 election right around the corner, there’s a chance recent volatility could continue, but a historical perspective should offer some reassurance.

The S&P 500’s average annual return from 1957 through Dec. 31, 2023, is roughly 10.3%. That means if you invested $100 at the beginning of 1957, you would have more than $72,000 at the end of 2023, assuming you reinvested all dividends. Adjusted for inflation, the average annual return is still 6.5% per year.

“You buy more shares when the prices are low, you buy less shares when the prices are high, and over time, you come out a winner,” said Dan Roccato, clinical professor of finance at the University of San Diego.