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Schwab's Self-Directed 401(k) Accounts Lose 10% In Q4
So were Schwab's results for "self-directed" significantly different than any other major brokerage? And since we're talking self-directed, what difference does the brokerage make in any case?
Got to agree here. Perhaps they could have said simply: 401(k)s became 361(k)s in Q4 and leave it at that?
An important point that I think was virtually ignored is that 401(k) brokerage accounts are typically options within more traditional 401(k) plans of funds. Thus employees that use these brokerage accounts tend to be more aggressive investors - ones who believe they understand markets and can do better than with the choices already in their plans.
Such investors would naturally tend to lose more when markets swoon. So what?
Comments
Global equities (MSCI ACWI) were down nearly 13% in the fourth quarter and almost 9.5% for the year.
An important point that I think was virtually ignored is that 401(k) brokerage accounts are typically options within more traditional 401(k) plans of funds. Thus employees that use these brokerage accounts tend to be more aggressive investors - ones who believe they understand markets and can do better than with the choices already in their plans.
Such investors would naturally tend to lose more when markets swoon. So what?
See, e.g. Scott Burns, They Don't Call Them 201(k)s for Nothing, April 24,2009.
https://assetbuilder.com/knowledge-center/articles/they-dont-call-them-201k-s-for-nothing