Adam Shell USA TODAY Published 10:11 AM EST Dec 12, 2018 Everybody’s heard of sticker shock. But what about account balance trauma? That’s a form of distress 401(k) savers with all their money invested in stocks will likely experience when they peek at their fourth-quarter account statements. If you've been watching the stock market slump in the final quarter of 2018, you know it’s been a dreary stretch. And that means you can’t dodge the financial pain — and the losses. By one estimate, the average 401(k) owner with 100 percent invested in U.S. stocks is currently sitting on a paper loss of $10,117 since the end of September. That rough approximation takes into account the 9.5 percent drop this quarter suffered by the Standard & Poor’s 500, an index of large U.S. stocks, and the record 401(k) average account balance of $106,500 at the end of the third quarter, according to Fidelity Investments’ analysis of its … [Read more...] about How does stock market drop affect my 401(k)?
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Adam Shell USA TODAY Published 7:29 AM EDT Sep 19, 2018 No matter how you measure it, the U.S. stock market is pricey. The median U.S. stock, when measured by share price relative to earnings over the past 12 months, for example, is almost 50 percent more expensive than at the top of the internet stock bubble in 2000, says Jim Paulsen, chief investment strategist at The Leuthold Group, a money-management firm in Minneapolis. But it's not just that one pricey data point that scares him. It's the long list of other so-called valuation gauges that "suggest record expensiveness." The U.S. stock market, the stock strategist says, is also trading at a record valuation today relative to home prices. And thanks to much better performance compared to foreign shares recently, they are now 17 percent more richly priced relative to overseas stocks than they have been in 16 years. And in the post-war era, the total value of U.S. stocks relative to sales has never been as … [Read more...] about Stock market getting dangerously expensive, putting 401(k)s at risk
Adam Shell USA TODAY Published 8:41 AM EDT Sep 10, 2018 Too much good news about the economy could be bad news for markets and your 401(k). It sounds counterintuitive, but history shows that when stocks and a slew of economic signals are at or near peak levels, financial markets are more vulnerable. The risk for stocks, which hit fresh highs in late August, is this: If the economy can't keep up its heady pace and business headlines turn less positive, disappointed investors could sell shares and send the market lower. Heady times At the moment, things sure are heady. On Friday, the government said hourly wage growth rose at its fastest pace since 2009 and the unemployment rate held at an 18-year low. That extends a trend of strong economic reports, with numbers coming in at their best levels in years. Consumer confidence is the highest since 2000. Small-business owners are the most optimistic they've been in 35 years. Profits of … [Read more...] about 401(k) investors: Stock market record, strong economy stir ‘peak’ fear
Ken Fisher Special to USA TODAY Published 10:00 p.m. UTC Aug 19, 2018 With 2018’s primary season ending, midterm races are taking shape. So is the likely market impact. Democrats will gain seats in the House of Representatives, maybe enough for control, while Republicans may gain slightly in the Senate. The real winner for markets, though, will be gridlock, in which no major legislation gets passed. And that’s bullish for stocks. Why gridlock? Because a decisive number of seats won't swing to one party or another. Democrats either win a tiny House majority or miss by a whisker. They need 23 more seats to flip it – doable. But predictions of a "blue wave" seem overly optimistic, given primary results. Yes, in traditional GOP-leaning districts, Democratic primary turnout is up relative to history. But Republican turnout remains mostly higher. This suggests Democrats gain seats in balanced districts but struggle beyond that. Thanks to gerrymandering, … [Read more...] about Why midterms should boost the stock market, 401(k)s
Adam Shell USA TODAY Published 11:57 p.m. UTC Aug 15, 2018 Just as the bull market for stocks is set to become the longest in history, U.S. investors are confronted with another crisis from a far corner of the world. What's giving Wall Street the jitters this time is Turkey's plunging currency, which is down about 40 percent this year against the dollar. Despite a brief respite and nearly 8 percent rebound Tuesday, the Turkish lira's free fall is causing acute economic pain in that country's economy, the world's 17th largest, and sowing fears that Turkey's woes will spread to other countries. Those concerns are already undermining confidence in global financial markets and causing asset prices to fall, especially in emerging markets and Europe. The damage has been more muted in the U.S., however, where the Dow Jones industrial average rose 112 points Tuesday, making up some of the ground lost the prior two trading days, … [Read more...] about Turkey currency crisis: What it means for stock market and 401(k)s