I am only a little surprised by this news.
Given last years 20% market drop we should expect some of this, but who knew that roughly one-third of America’s 401k millionaires had just over one million in their 401k?
America’s ranks of so-called 401(k) millionaires are diminishing following last year’s stock market rout.
The number of 401(k) accounts with at least $1 million in retirement savings fell 32% last year, to 299,000, from 442,000 in 2021, according to new data from Fidelity Investments.
The shrinking number of 401(k) millionaires comes after the S&P 500 tumbled 19.4% last year . . .
The average balance in a 401(k) plan tumbled 20.5% in 2022, reducing the typical employee nest egg to $103,900 at the end of 2022, according to Fidelity.
i lost about 1% in my 35 year old 401k over the last year. i do have a. lot of it in company stock, which was flat in the past year. glad i did better than most.
I anticipate 10-12 years of bumpy sideways.
There is a common perception that the market goes down and goes up again and overall moves “bumpy upwards.” Like the 4-year (QQQ) chart below. I certainly believed that for years.
Here is the post 1978 part of the chart.
Congratulations!!
However, a person could look at that limited sliver and conclude “violent sideways periods almost never happen so we are probably not entering one now.”
That would be an incorrect conclusion.
It would be what @WuWei calls “recency bias.”
I’m doing good the people younger than me I work with who didn’t get on the financial ladder before the market rise and house prices going thru the stratosphere are ■■■■■■■
you have to think long term in life, my first job with the big company was entry level, barely making minimum wage. i proved my worth got promoted 3 times and here i am 37 years later with a 7 figure 401k. did i get lucky?
yes.
but with hard work and a little luck gen z can live the american dream too.
cant be whining how boomers got it made. time for action, not whining.
From the October 2022 bottom (shortly before I posted that)
The S&P has risen 50%. (anyone who went all cash before that and then went all-in that months is doing very very well.) I am sincerely happy for them as I am for you @biggestal99
But here’s the thing . . . In that same time S&P earnings are up less than 2-tenths of one percent. Clearly this is not the result of a healthier economy. It is the result of something else.
We don’t have to dig very far to find it
Bitcoin is up 212%
Gold is up 48% in that same time and
Long Bonds are up 11.55% in that same time.
Gold and Long Bonds typically run inverse to the S&P and them rising is a sign of economic weakness not strength. Bitcoin is intended to run inverse to the dollar.
What is down since then is the M2 (dollar supply.) It is down by $600b.
We can debate what it “whys” and “what does it means,” but clearly and undeniably what actually happened is that people took some of the leftover helicopter money off the sideline and threw it at every kind of investment, bullish investments, bearish investments, optimistic investments, doomsday investments.
What you are witnessing (and profiting from) is NOT “the economy is getting stronger so let’s invest in stocks.” What you are witnessing (and profiting from) is “We no longer want to hold dollars so let’s get rid of them and hold something else.”
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PS have you heard about Warren Buffet’s latest moves?
