One widely held belief about the stock market involves the notion that individual investors have been fleeing stocks like the plague recently. But according to a new report from Vanguard Group, that’s not the case, Jason Zweig reports on The Wall Street Journal’s Total Return blog. 

Vanguard takes an annual survey of 3 million-plus Americans who take part in retirement investing plans that the firm administers. In 2011, the new study shows, the percentage of those investors’ retirement funds that were invested in stocks fell by 3 percentage points from 2010, and was 8 points lower than it was in 2007, Zweig says. Nevertheless, the percentage invested in equities was still 65%.

“While the financial commentariat would have you believe that retail investors have been yanking their last farthings out of the stock market, the folks in Vanguard’s huge sample of retirement savers still have two-thirds of their money riding on stocks,” Zweig says, adding that those same investors were putting an even higher percentage of their 2011 contributions — 71% — into stocks. “If this is ‘the death of equities,’ the funeral seems extraordinarily well-attended,” Zweig says.

The retirement investors have, however, dramatically scaled back on the amount of money they are putting into diversified stock funds, Zweig says, and they’ve also cut back on their allocation to their own company stock. Instead, they are putting more money into target-date funds that invest in stocks, bonds, and cash.

“Retirement investors have been selling funds that invest exclusively in stocks and moving the proceeds (along with their new money) into target-date funds that invest partly in stocks,” Zweig says. “The net result is an essentially unchanged allocation to equities — perhaps at a lower level of anxiety, since target-date funds have a ballast of bonds and cash that keep them from pitching as violently in stock-market selloffs.”