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What % of the market is held up by automatic contributions?
Posted on 5/12/22 at 6:29 am
Posted on 5/12/22 at 6:29 am
I'll guess 15%. I really have no idea but assume it has to be a sizeable portion. Meaning 401k purchases, matching, hsa etc.
5
Posted on 5/12/22 at 6:51 am to Billy Blanks
Not sure, but I can't imagine many people would stop those. I sure won't. Time is on most peoples side.
Posted on 5/12/22 at 7:02 am to Billy Blanks
Great question, I think it’s much higher. 30-40% if not more at this point. Mike Green has done a lot of great research into this if you look him up.
Posted on 5/12/22 at 7:08 am to FnTigers
quote:
Not sure, but I can't imagine many people would stop those. I sure won't.
Nobody will unless mass layoffs happen. Now would be the time to up your contributions not decrease them.
Posted on 5/12/22 at 7:09 am to Billy Blanks
Good question
When it comes to 401k, I have always believed that a downward trending market is a gift horse
When it comes to 401k, I have always believed that a downward trending market is a gift horse
Posted on 5/12/22 at 7:44 am to Billy Blanks
Dollar cost averaging is the gift that keeps on giving to the investment banks.
Posted on 5/12/22 at 7:50 am to BestBanker
Do you factor in all the boomers pulling money out of the market? I have to think that percentage goes down each year.
Posted on 5/12/22 at 8:17 am to Billy Blanks
It's almost 50% of the total equities market and is $0.90 of every marginal $1 of inflows
Posted on 5/12/22 at 8:36 am to ThermoDynamicTiger
quote:
Do you factor in all the boomers pulling money out of the market? I have to think that percentage goes down each year.
Judging from what happened in my family, their heirs selling so they can spend the financial windfall ASAP more than make up for any decline in that.
Posted on 5/12/22 at 12:16 pm to Diseasefreeforall
Quote:
“I can’t imagine many people would stop those”
2008-2009 bunch of my co-workers cashed in their 403-B’s,took the loss and paid the tax penalties.Some of them,I tried to talk some of them out of it but they wouldn’t listen.In fact,they couldn’t believe I was still contributing my full 15%.
My brother-in -did also.
It paid off bigly for me.I’m taking a hit now but I’m still quite a bit ahead.
“I can’t imagine many people would stop those”
2008-2009 bunch of my co-workers cashed in their 403-B’s,took the loss and paid the tax penalties.Some of them,I tried to talk some of them out of it but they wouldn’t listen.In fact,they couldn’t believe I was still contributing my full 15%.
My brother-in -did also.
It paid off bigly for me.I’m taking a hit now but I’m still quite a bit ahead.
Posted on 5/12/22 at 12:47 pm to LSUA 75
I really don’t mean to sound harsh (really!), but I knew people like that too. They cashed out during the 2008 financial crisis, saying things like “this is the end of capitalism”, etc. These were people my age (years to go before retirement) and younger. They let their weak hearts get ahead of their critical thinking brains.
It was exactly when Michelle Caruso-Cabrera questioned the future of capitalism on CNBC that I began executing buys. I took her (and others) hyperbolic fear mongering as a good sign that the herd was stampeding. And of course, that turned out very well.
As for the OP’s question, one would have to first determine the allocation of those automatic contributions. Though I suspect the majority goes into equities, it wouldn’t be all.
It was exactly when Michelle Caruso-Cabrera questioned the future of capitalism on CNBC that I began executing buys. I took her (and others) hyperbolic fear mongering as a good sign that the herd was stampeding. And of course, that turned out very well.
As for the OP’s question, one would have to first determine the allocation of those automatic contributions. Though I suspect the majority goes into equities, it wouldn’t be all.
Posted on 5/12/22 at 1:09 pm to Triple Bogey
quote:
Nobody will unless mass layoffs happen. Now would be the time to up your contributions not decrease them.
I totally agree with you that now would be the time to hold steady, if not increase contributions (depending on your age and financial situation, of course). But I think that some emotion driven investors will pull back - and already are. Even on this board, every day there are questions and comments from people about pulling back, if not going to cash in their retirement accounts. Some people are their own worst enemies.
The ones making posts about killing people if the economic situation deteriorates, and the one who talked about losing all hope and waiting for the rapture, are (hopefully) just outliers. But the more Chicken Littles that begin to hatch, the greater the longer term opportunity for the rest of us.
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