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401K Balances Climb Recently

Wednesday, May 29, 2013 - 5:44 PM

401(k) balances climb with stock market - Encore - MarketWatch

"For some investors 55 and older–a group “most vulnerable during the last market downturn given their short timeframe to retirement,” according to Fidelity–the gains have been even better. On average, investors in this category who have at least 10 years’ service at their current employer saw their account balances rise 95%, from $130,700 in March 2009 to $255,000 at the end of this March. (The Standard & Poor’s 500-stock index roughly doubled over that same stretch.)"

Well, for 55-year-old folks, the equity coverage should be at most 40%; not 100%.  Who dares to put all retirement money in S&P 500 and double the investment from March 2009 to the end of March 2013?? 

If a naive invesor sees this article and put 100% of his retirement in equity, it will be the tragedy after 1-2 years; or shorter.

One should ask oneself: How long will this abnormality continue?  The stopping of Fed. Bonds-buying is one testing juncture.  The stop of the QE stuff in its entirety is another.  Or any financial trigger in between...  Tick, tick...
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427
1. Wednesday, May 29, 2013 - 7:50 PM
ShorebreakShorebreak2,700 posts since
Apr 6, 2010
Rep Points: 14,635
2. Wednesday, May 29, 2013 - 8:01 PM
This is a time for caution, folks.  Watch every step.
51hh51hh1,476 posts since
Jan 16, 2010
Rep Points: 6,427