Most mutual fund owners would feel comfortable sitting tight if the stock market experienced a correction of 20% or more.

That's according to a survey by Dreyfus Corp., the asset management unit of Mellon Bank Corp., Pittsburgh.

The study, unveiled last week, was drawn from research done last year in conjunction with the National Center for Women and Retirement Research. It examined investing habits of 1,384 people with a median age of 62.

An earlier installment of the survey, released in May, focused on gender differences in investing.

In the latest report, Dreyfus said 77% of those contacted owned mutual funds and had saved an average of $267,000. The rest held certificates of deposit or savings accounts and had accumulated $83,000 on average. Survey participants were not necessarily investors in Dreyfus' $110 billion fund family, a company spokeswoman said.

One key finding was the growing level of comfort among fund holders with investing for the long term, said Christopher L. Hayes, executive director of the research center and principal investigator in the study.

An overwhelming 68% of fund investors contacted said they would sit tight in a market correction, preferring to view the market in the longer term.

Of the rest, 20% said they would call a financial adviser before making a decision if the market dropped more than 20%; 7% said they did not know what they would do; 4% said they would liquidate a portion of their investments; and 1% would liquidate their entire portfolio.

The response suggests that as mutual funds grow more popular investors are learning to ride out the market's ups and downs, Mr. Hayes said.

In 1992 only 27% of U.S. households owned mutual funds, according to figures from the Investment Company Institute, Washington. In 1997 this share had grown to 37.4% of households.

Mr. Hayes said the results may also be colored by a change in the investment habits of older people. Increased longevity has caused many older investors to shun traditionally safer investment vehicles in the fixed-income market in favor of the equity market, Mr. Hayes said. "That's clearly bolstered by the positive nature of the bull market."

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