Market pundits have been looking for signs of stock investor panic since equity markets took a dramatic turn for the worse at the beginning of 2022.

A Bloomberg headline in mid-July read, “BofA Survey Shows Full Investor Capitulation Amid Pessimism,” followed by “Investors No Longer ‘Apocalyptically’ Bearish, BofA Survey Shows,” in mid-August.

We all know investors are lemmings: At the first sign of danger they run for cover, and, apocryphally, it turns out, plunge to their deaths.

But what does recent data say about what investors are actually doing with their investments?

Quite the opposite.

Morningstar data shows that, while less money has been dedicated to US equity strategies  in 2022 than during the Covid bull market, investors are as group staying put. Flows into these strategies are, surprisingly, positive in 2022, to the tune of $69 billion. That sounds like a lot, but it represents a growth rate of just 0.5% for the year on a US$13.5 trillion base.

That’s not very lemming-like.

A lesson from the Savannah

It occurred to me during my hours-long Internet outage this afternoon that if retail investors were ever lemmings, they certainly are not now.

In fact, investors behave more like impalas.

This past July I was lucky enough to take a bucket-list trip by travelling with my family to South Africa to go on safari.

During one morning game drive, our guide got word over the radio that a leopard had been spotted and was stalking a herd of impala.

We quickly caught up to the leopard and followed her through the bush in our Toyota Landcruiser. Less than a minute later she had marked her prey and taken it down. By the time we caught up to her less than a minute later, a large hyena, which we had observed tracking the leopard, had stolen the kill from her and was taking its first bites of lunch. (There’s investing lesson in the hyenas’ strategy that I’ll save for another column!)

As more hyenas arrived on the scene, I noted a curious thing. The herd of impalas from which the prey had just been plucked had not run for their lives. They were visible over the shoulders of the overjoyed hyenas, just a hundred yards away or so.

And they were doing what they always do: foraging and eating grass. A member of their group had been taken, but they calmly went about their business, knowing that to survive they need to continue eating and reproducing. That would not be possible if they were always afraid, always on the run. But there certainly is a price to be paid if you're a herd of impala.

Investors, it turns out, have employed a similar strategy. Either though education or experience, they know timing the market is a fool’s errand. They have learned that you need to endure hardship to capture the value of stock investing over time.

US stock investors are staying put. It makes for lousy headlines. But perseverance through adversity is the only strategy to not only survive, but thrive.