Fidelity lays out the playbook of successful investors

Your retirement account dropped 8% in a single quarter, and every instinct told you to sell everything and sit in cash. If that sounds familiar, you are not alone, but Fidelity Investments has data suggesting the opposite move tends to work far better over time.

The firm, which manages retirement savings for more than 24.8 million workplace participants, published a framework outlining the behavioral patterns that separate investors who build lasting wealth from those who undermine their own progress.

The conclusions directly challenge some of the most common emotional impulses that investors feel during volatile market periods.

Fidelity’s data on staying invested reveals a staggering performance gap

The centerpiece of Fidelity’s playbook is a longitudinal study of 1.47 million workplace retirement savers tracked from June 2007 through June 2017. Investors who maintained their stock allocations through the 2008–2009 collapse saw their account balances grow by 147% over the following decade, including both investment returns and contributions, Fidelity reported. 

Those who abandoned stocks during the fourth quarter of 2008 or the first quarter of 2009 averaged just 74% growth over the same period. Roughly 1.5% of participants went to 0% equities during the fourth quarter of 2008 or the first quarter of 2009. 

“The biggest mistake investors make is assuming they need to react to every headline…A well-built plan is designed to handle uncertainty, not follow the news cycle,” said Julian Morris, Founder and Principal, Concierge Wealth Management.

Other major research firms have reached strikingly similar conclusions about the devastating financial cost of attempting to time the market. Investors who missed just the 10 best trading days in the S&P 500 from 1996 to 2025 saw their total portfolio returns fall by about 56%, according to a Hartford Funds analysis cited in Kiplinger. 

The annualized total return of the S&P 500 from 2006 to 2025 was 11%, but missing those 10 days dropped it to 6.6%, the Fidelity Learning Center reported.

Fidelity’s Q4 2025 retirement data shows savers are heeding the message

The firm’s quarterly retirement analysis for the fourth quarter of 2025, drawn from 26,200 corporate defined contribution plans and 24.8 million participants, shows that the stay-the-course message is landing with American workers. 

The average 401(k) balance climbed more than 11% from a year earlier (and 1% from the prior quarter) to reach a record $146,400, driven by consistent contributions and positive market performance, marking the third straight year of double-digit annual balance increases.

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Total average savings rates held at 14.2% for the third consecutive quarter, combining an employee contribution rate of 9.5% with an employer match of 4.7%, just under Fidelity’s recommended 15% target. The number of 401(k) millionaires hit an all-time high of 665,000, a milestone that reflects decades of consistent saving. 

Meanwhile, 11.2% of workers increased their 401(k) contribution rates during the quarter, with more than 13% of Gen Z participants boosting theirs,  a sign that younger savers are leaning in rather than pulling back.

“Despite uniquely challenging times, retirement savers remain committed to their financial futures by staying the course with their retirement savings,” said Fidelity Investments President of Workplace Investing Sharon Brovelli in the firm’s Q4 2025 retirement analysis.

“The consistency so many Americans show in maintaining responsible savings behaviors and keeping a long-term perspective will serve them well in retirement,” she added.

Retirement savers stayed disciplined through market volatility as 401(k) balances, contribution rates, and millionaire accounts reached record highs nationwide.

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Morningstar research confirms that lower fund fees lead to higher returns

Fidelity’s framework highlights the importance of keeping investment costs as low as possible, and independent research from Morningstar reinforces that principle with decades of performance data.

The cheapest 20% of funds by expense ratio attracted $930 billion in net new money during 2024, while the remaining 80% saw $254 billion in outflows, Morningstar’s 2024 U.S. Fund Fee Study found.

Investors saved an estimated $5.9 billion in fund expenses last year as the average expense ratio for U.S. mutual funds and ETFs fell to 0.34%, down from 0.83% two decades earlier. Morningstar’s research consistently finds that lower-cost funds tend to outperform higher-cost funds across most rolling time periods.

Diversification across asset classes remains a cornerstone of Fidelity’s playbook

Fidelity’s guidance emphasizes that owning a broad mix of stocks, bonds, and other assets can help control risk and keep investors committed to their plans during turbulent stretches. Within equities, the firm calls for spreading exposure across regions, sectors, investment styles, and company sizes from small cap through large cap.

For fixed income, the guidance recommends diversifying across credit qualities, maturities, and issuers to build a portfolio that delivers growth potential at a risk level that does not push an investor toward panic selling during the next downturn.

Tax-aware account placement can boost returns without changing your investments

The final pillar of Fidelity’s playbook focuses on “asset location,” the practice of matching investments to the accounts that offer the most favorable tax treatment. Morningstar’s retirement research found that proper asset location increased a retiree’s final bequest by an average of $112,000 on a $1 million portfolio.

BlackRock’s asset location framework recommends placing taxable bonds, including high-yield bonds, and real estate investment trusts (REITs) in tax-deferred accounts, as they tend to generate income (vs. capital gains) that will be taxed at the client’s ordinary income tax rate.

The strongest investor returns come from discipline, not brilliance

Fidelity’s complete framework adds up to a portrait of successful investing that has very little to do with stock-picking skill and almost everything to do with behavioral discipline. The investors who build the most wealth are those who start early, save consistently, keep costs low, stay diversified, and resist the urge to abandon plans during volatile markets.

The Q4 2025 data reinforces that conclusion: despite tariff uncertainty and inflation concerns, the 24.8 million 401(k) participants Fidelity tracked as of December 31, 2025 continued growing their balances and savings rates rather than retreating from stocks, according to the firm’s Q4 2025 retirement analysis.

Related: Fidelity spots a stunning money trend among women

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