At Vanguard, more than 99 percent of account holders do not make any trades. In the fourth quarter of 2015, when the market was also bouncing around, only 4.5 percent of Fidelity's retirement account holders put through a trade, which is consistent with most months, said Jeanne Thompson, a vice president at Fidelity.
Even in the fourth quarter of 2008, in the depths of the last recession, only 6 percent of Fidelity account holders changed their allocations, and only 1 percent took everything out of equities and went to cash.
"We followed those people over time, and if they stayed in cash, they didn't fare nearly as well as the people who stayed in equities," said Thompson.
Thompson advises investors to analyze their accounts at least once a year to make sure they are on the right track.
Of particular concern are those who take half-measures: keeping part of their balance in target-date funds and trying their hand at allocating the rest.
"It's designed to be an all-in-one solution," Thompson said. "You're kind of defeating the purpose of it if you don't."
Custom Allocations
If leaving everything to the target-date fund manager makes you too anxious during big market swings, you may customize allocations for additional fees. Thompson said more employers are offering managed account options within 401(k) plans. Private financial advisers also can do this, as can automated online account management services, like Betterment.com.
Rather than dump target-date funds altogether, an investor could adjust a portfolio simply by choosing a more appropriate fund, Thompson said. Do a quick search online to see how your fund stacks up against other options in terms of return and expenses, she advised.
Millennials, in particular, could be in target-date funds that underestimate how long they will work. A study Scottrade released on Wednesday found that millennials aged 18 to 34 on average expect to retire at 55.