The equity markets dropped by nearly 50% during the Great Recession of 2008 and 2009, but retirement plan account balances of those who stayed the course recovered their full value by 2010, despite the lingering economic challenges.
Focused analysis of market movements, business challenges and legislative and regulatory actions.
“Many states are home to headquarters or critical operations for numerous mutual fund sponsors where Americans have entrusted their savings to meet a wide range of financial goals. Those mutual fund companies must remain in operation to ensure access to invested monies for shareholders across the country,” ICI's president wrote in a letter.
Everyone wants lifetime income products to be portable, but that doesn’t mean building such solutions will be easy.
Media outlets suggest one of the federal government’s responses to the coronavirus outbreak will be to temporarily guarantee money market funds—mirroring what proved to be an important policy decision made during the Great Recession.
The U.S. stock market has entered bear market territory after its record bull run; one silver lining is the opportunity to educate people about annuities.
As the markets tanked amid fears of a worldwide coronavirus outbreak, the last week of the month was among the busiest stretches in the 20 year-plus history of the Alight Solutions 401(k) Index.
The reason why target-risk funds gave way to target-date funds is the perceived simplicity of just using one’s retirement date to set the portfolio's investment risk tolerance—but this approach doesn’t work optimally for all participants.
“Although the unfortunate reality is that volatility like this may be here to stay until the coronavirus runs its course, experience has proven time and time again that cool heads typically prevail,” analysts say.
Despite periods of volatility in the past decade, retirement plan investors have benefitted from a strong equity market and their commitment to investing in tax-qualified vehicles.
Investors continue to favor fixed income, the Alight Solutions 401(k) Index finds.
The trend of small trades away from equities to fixed income funds seems to suggest participants were rebalancing their portfolios, not making drastic changes to their investment mix, says Rob Austin, with Alight Solutions.
PIMCO says that rather than go with an all-actively managed target-date fund (TDF) or an all-passively managed TDF, a mix of the two makes sense—and that there is particular logic to assigning the fixed income portion of the portfolio to active management due to outperformance.
“Stocks are trading at a very high price-to earnings ratio, and we don’t see that as sustainable,” says Jon Barry, senior retirement strategist at MFS.
From an operating perspective, plans can use private investments in a multi-asset class investment vehicle.
An ever-greater proportion of the wealth being generated by the U.S. and global economies is locked away in private equity markets.
“We think 2020 will be another year of slow growth—durable enough to avoid recession but disappointing to those looking for improvement,” says Bob Browne at Northern Trust.