Three and a half years ago, two of my cousins separately asked me, "Are you listening to Serial?" I had no idea what they were talking about. "The podcast," they continued. "It's so good. You should listen to it."
Companies that offer employees a 401(k) plan have many choices when selecting service providers for defined contribution plans. The challenge for many businesses, especially those small- and medium-sized, is that day-to-day operations leaves little time to review, monitor, and optimize their retirement plan on a regular basis. The result is that many plan sponsors lack a comprehensive understanding of who the top 401k providers are. Because your plan assets change due to financial market conditions and retirement plan contributions, it's important for plan sponsors to understand the service provider landscape and ensure that their plan is with the best provider for their participants (employees.)
PLANSPONSOR magazine conducts an annual recordkeeping survey and in 2017 profiled 55 leading providers that represent more than $6 trillion in assets and are estimated to account for 85% of the total defined contribution market.
Here's their list of the 2017 top 401(k) providers and my thoughts.
Today marks the New Year of lunar calendar. We turn the page on the Year of the Rooster and welcome the Year of the (Earth) Dog. Some famous dogs are Winston Churchill, Mother Teresa, Elvis Presley, President Donald Trump, former Presidents Bill Clinton and George W Bush, Michael Jackson, Madonna and Steven Spielberg. Clearly lots of creative people and powerful leaders, but that isn't important to us. We wonder what the Year of the Dog has in store for the stock market.
The Plan Sponsor Council of America (PSCA) released its 60th Annual Survey of Profit Sharing and 401(k) Plans this week. The good news is that participation rates in retirement plans, including defined contribution profit sharing and 401(k) plans, rose steadily. This means that more employees are taking advantage of their employer sponsored retirement benefits. Plan sponsors also continue to employ plan features like automatic enrollment, auto-escalation, and Roth 401(k)s to assist employees to grow their retirement savings.
This morning on Yahoo Finance, the top story is titled "Market experts are starting to see parallels to the financial crisis." According to writer Dion Rabouin, some market analysts and fund managers believe that the current environment is beginning to look like the early days of the financial crisis of 2007-2009. The key argument is that the volatility products that collapsed on Monday are similar to the leverage in subprime mortgages. Here is an excerpt:
Today I want to give you a tip to keep you out of trouble: never invest in something that you don't understand. That includes bitcoin, MLPs, annuities, structured products and even stocks. This may seem obvious but I have seen people make this simple mistake because they are chasing the hottest thing in the moment. Early in my career, it was internet stocks. People were buying companies with no earnings and no business plan and were simply interested because the price was going up. Years later, it was subprime loans. The worst quality mortgages were sliced and diced and then packaged as supposedly A rated bonds. When things are too good to be true and you can't understand how it is possible, trust your gut and run away as fast as possible.
On Friday, the Dow Jones Industrial average fell 666 points. The scary headlines followed suit. "Dow plunges 666 points -- worst day since Brexit" "Dow drops 666 points and posts its worst week since 2016" It's no surprise that over the weekend, I had several conversations and all of them were about the stock market drop (well at least until the Super Bowl began). Friends wanted to know what I think about the sell off. To sum up my answer, I will use a favorite Coldplay song: DON'T PANIC.
Companies from the United States doing business in China are becoming more optimistic about the China-US business environment despite fears of trade tariffs and political rhetoric. According to the 2018 China Business Climate Survey from the American Chamber of Commerce in China and Bain & Company, about 36 percent of respondents believe relations between the two major trading partners will improve this year, up substantially from just 17 percent in 2017. "Regarding the economy, there is cautious optimism that the 'new normal' rate of growth is sustainable for the foreseeable future, providing opportunities for business to expand," said William Zarit, chairman of AmCham in China.
The global equity markets are off to a red hot start and optimism is at an extreme following the tax reform bill to close out 2017. In Davos, billionaire hedge fund manager called it "stupid to own cash." Last week saw a record inflow of $33.2 billion into stock ETFs and mutual funds according to Bank of America Merrill Lynch. Is this a sign of euphoria and potential warning sign for the market?
On Thursday, I had the pleasure of returning to the New York Stock Exchange for the second time in a week. Last Tuesday was for opening bell and this time it was closing bell with the Aussies ringing the bell for Australia Day. Thanks to Goldman Sachs Asset Management (GSAM) for the invite and their insights on their market outlook for 2018. Their tag line for this year is "Pro-growth, Pro-equity, Pro-reality." They share our view that global growth will continue in 2018 and given the low interest rate environment that means investors should favor stocks over bonds.
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