Huge first-quarter losses followed by huge second-quarter gains means the S&P 500 fell only 2.7 per cent in the first half of the year. That small loss "feels miraculous" given everything that's happened in 2020, says Ritholtz Wealth Management's Ben Carlson.

So did ordinary investors enjoy this "miraculous" recovery or were they spooked into selling during the crash? The stereotype of retail investors being a skittish bunch was reinforced by a recent Wall Street Journal story reporting that 31 per cent of Fidelity investors between the ages of 65 and 69 sold all of their stocks between February and May.

Understandably, that got a lot of press coverage, but it turned out there had been a mix-up. In fact, just 7.4 per cent of those investors made any changes to their portfolio.

Of that small minority, 31 per cent reduced their stock holdings. If you do the maths, this implies only 2.3 per cent of Fidelity's retirees opted to reduce their exposure to equities. This picture of investor calm is confirmed by Vanguard data. It shows 95 per cent of investors didn't touch their retirement portfolios in the first four months of 2020, while fewer than 1 per cent panicked and sold all of their stocks. Vanguard investors were similarly calm in their non-retirement accounts; of those who did trade, the vast majority opted to buy rather than sell stocks. In other words, the so-called dumb money did the smart thing – nothing.