When people withdraw money from an index fund -- say, to put a downpayment on a house or move it into a fixed income fund for retirement -- they are effectively

When people withdraw money from an index fund -- say, to put a downpayment on a house or move it into a fixed income fund for retirement -- they are effectively placing a sell order on every stock in the index. And if they put money in from their monthly paycheck, they're placing a buy order. As long there is a reasonably good balance of buyers and sellers of mutual funds, the underlying securities will find equilibrium.