7 ms·

Isn't the counter-point to this the stock price of PG&E? Look at its performance over the last 5 years, it's down to ~$11 from ~$50. If the the whole market lo

Isn't the counter-point to this the stock price of PG&E? Look at its performance over the last 5 years, it's down to ~$11 from ~$50. If the the whole market looked like this in the next year, people's 401k accounts would probably be demolished.

Guest42 6y ago
Investing is inherently risky and prices ought to reflect a companies viability and performance. 401ks give a variety of options to reduce risk including money markets, bonds, and stocks in different sectors with diversification options
paulhodge 6y ago
Just optimizing for 401ks is going about it wrong. $500b from the stimulus went to corporations, which indirectly boosts stock prices, which indirectly boosts 401ks. (unless the market still crashes). It's essentially trickle-down economics. If we wanted to improve individual's retirement savings then it would more effective to just divert more of that $500b to social security.
- bitcoinbutter 6y ago
  The stimulus packages seem more focused on ensuring that asset prices remain inflated. The idea that the average person will see any major impact from the S&P500 dropping to 2000 points is laughable. How many people do you know that truly had their lives ruined by the 2008 crash? Allowing the markets to find a bottom and recover creates opportunities for social mobility. The people who don't want asset prices to drop are rich people. They are the ones who own the assets.
mandelbrotwurst 6y ago
It isn't going to be every company. It's better in the long run for the health of the market if companies' financial success correlates with their asset prices - it isn't good for investor confidence to add in an X factor of whether companies are going to have the political capital needed to get bailed out.
ericd 6y ago
There's a reason 100% allocation to equities is generally not recommended for retirement accounts...

Guest42 6y ago

Investing is inherently risky and prices ought to reflect a companies viability and performance. 401ks give a variety of options to reduce risk including money markets, bonds, and stocks in different sectors with diversification options

paulhodge 6y ago

Just optimizing for 401ks is going about it wrong. $500b from the stimulus went to corporations, which indirectly boosts stock prices, which indirectly boosts 401ks. (unless the market still crashes). It's essentially trickle-down economics. If we wanted to improve individual's retirement savings then it would more effective to just divert more of that $500b to social security.

bitcoinbutter 6y ago
The stimulus packages seem more focused on ensuring that asset prices remain inflated. The idea that the average person will see any major impact from the S&P500 dropping to 2000 points is laughable. How many people do you know that truly had their lives ruined by the 2008 crash? Allowing the markets to find a bottom and recover creates opportunities for social mobility. The people who don't want asset prices to drop are rich people. They are the ones who own the assets.

mandelbrotwurst 6y ago

It isn't going to be every company. It's better in the long run for the health of the market if companies' financial success correlates with their asset prices - it isn't good for investor confidence to add in an X factor of whether companies are going to have the political capital needed to get bailed out.

ericd 6y ago

There's a reason 100% allocation to equities is generally not recommended for retirement accounts...