401(k) participants' trading skyrockets during debt drama

401(k) participants' trading skyrockets during debt drama
Daily trading volume among 401(k) plan participants soared during the height of Congress' debt-ceiling debate, producing a massive transfer to fixed-income investments from equities, according to Aon Hewitt.
AUG 02, 2011
Daily trading volume among 401(k) plan participants soared during the height of Congress' debt-ceiling debate, producing a massive transfer to fixed-income investments from equities, according to Aon Hewitt. Trading volume among the 4.7 million participants in 107 401(k) plan clients of Aon Hewitt jumped to $900 million on July 28 and $862 million on Monday, the day before President Barack Obama signed legislation raising the debt ceiling. The typical daily trade volume is $300 million to $400 million, Pamela Hess, director of retirement research, said in an interview. By Tuesday “things seemed to have quieted down” and by Wednesday “trading volume was near average,” she said. Precise numbers for those days were not immediately available. Of the assets transferred by participants last week, 96% went into fixed-income investments from equity holdings, Ms. Hess added. On Wednesday, “the movement was net into equities, with company stock as a big driver,” she said “This could be people seeing the opportunity to purchase employer stock while the markets are down.” Robert Steyer is a reporter for Pensions & Investments, a sister publication to InvestmentNews, where this article first appeared.

Latest News

Retirement withdrawal strategies shift as US assets hit $51.2T
Retirement withdrawal strategies shift as US assets hit $51.2T

Advisors say record balances aren't a retirement income plan and urge clients to benchmark their lives, not an index

RIA revenue tool targets fee leakage as PE growth pressure mounts
RIA revenue tool targets fee leakage as PE growth pressure mounts

Wealth enterprises are leaving revenue on the table - a new PureFacts and Ascentix partnership aims to help firms take it back.

The Stacking Strategy: How Intelligent Allocation Can Create Better Tax Outcomes
The Stacking Strategy: How Intelligent Allocation Can Create Better Tax Outcomes

What if one investment decision could create tax-saving opportunities across your entire portfolio? Chris Vizzi shares how the Stacking Strategy helps investors align tax planning, portfolio construction, and wealth preservation to maximize long-term outcomes while keeping more of what they earn.

AI could drag down RIA valuations, warns Alaris CEO Allen Darby
AI could drag down RIA valuations, warns Alaris CEO Allen Darby

Buyers spending on AI may treat less efficient sellers as overstaffed and price the cost of rightsizing into lower offers

Former Western Asset Management star bond manager fined $3 million
Former Western Asset Management star bond manager fined $3 million

Kenneth Leech pleaded guilty in June to one obstruction charge, and could face six to 12 months ⁠in ​prison.

SPONSORED Built on insurance experience to deliver on long-term promises

Knighthead Life entered the market with a competitive MYGA. A strong launch earned advisor confidence and paved the way for FIAs.

SPONSORED In the Age of AI, Trust Becomes the Advisor's Greatest Asset

As AI makes financial information more accessible than ever, Lana Hock explains why human judgment, trust, and empathy remain the qualities clients value most in a financial advisor