This will be partially offset by people like me who are buying cheaper shares of the funds in their 401K as this Friday is payday. Besides buying a set of shares every payday is a simple way to do dollar cost averaging. If you are not planning to use the money you investing in the stock market in the next few months you will come out at worst neutral, and likely ahead after the panic subsides.
Yes everyone knows that. But new investors who have had big gains in the past 10 years will rush to stop all their gains from vanishing - they dont have the market experience in real life.