The Indian retail equity mutual fund investor has continued to baffle commentators and policymakers by her behaviour across the previous few mega market mayhem events. Equity flows have remained net positive and the haemorrhage that a covid-19-induced market crack should have caused was clearly missing up to the end of April 2020—with some of the worst one-day falls across a few days covered in that period. Data shows that retail money in equity funds actually rose over the worst of the market crash in the three months of February, March and April 2020 and was 55% higher than the previous year same period. Systematic investment plans (SIPs) have held their flows at about ₹8,500 crore a month—there have been pauses but no dip. But the same retail investor has rushed to redeem his debt fund portfolio and flown to the safety of fixed deposits that have seen a 33% growth over the same period. What’s going on? This should have been the reverse—a rush to safety should have killed the equity funds. When commentators and policymakers put this down to quirky or eccentric investors, they make the error of looking at retail investor behaviour divorced from the marketplace in which they operate. In fact, the actions of retail investors show the robustness or flaws in the regulation that affects how firms behave in the markets and how smartly they are able to bend the rules and thereby reduce trust in the marketplace.