Participants December 13, 2016

DC Plan Participants Were Active Traders in November

The highest trading day of 2016 was November 9—the day immediately following the election—when balances traded were at 0.10%.
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With an average of 0.035% of balances traded each day—the highest level since January 2013, investors in defined contribution (DC) plans kept busy for the month of November, according to the Aon Hewitt 401(k) index.

Trading activity levels were reported above-normal just days before the November 8 presidential election, with trades moving money from equities to fixed income. There were eight above-normal trading days in November alone, the highest since May 2015.

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Among the top in recent history and the highest trading day of 2016 was November 9 when balances traded were at 0.10%, about four and a half times the normal trading level. Following the immediate volatility that occurred after the election, investors were trading into equities at a slower pace for the second half of November.

For asset classes with the most inflows, GIC/stable value funds came in first with $255 million, followed by money market funds ($100 million) and small U.S. equity funds ($56 million). Asset classes with the most outflows included company stock funds ($370 million), bond funds ($74 million) and specialty/sector funds ($38 million).

Combining contributions, trades and market activity in participants’ accounts, the percentage of balances in equities at the end of the month was 65.0%, a minimal increase from 64.4% at the end of October. New contributions saw no change from the previous two months, however, with 65.7% of employee contributions investing in equities.
Data and Research December 13, 2016

Saving More a Top Financial Goal in 2017

Among those thinking about the long term, 64% want to save more for retirement in an individual retirement account (IRA) or 401(k) plan.
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Forty-five percent of people who Fidelity Investments surveyed said they are better off financially this year than they were in 2015. This is the highest level since Fidelity started this survey eight years ago. Seventy percent believe they will be better off financially in 2017, and 36% have set at least one financial goal for next year.

Asked what their financial goal for 2017 is, 50% said to save more, 28% said to pay down debt, and 16% said to spend less.

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Despite their optimistic outlook on their personal financial situation, 65% are worried about unexpected expenses, and 62% are concerned about the economy.

Among those thinking about the long term, 64% want to save more for retirement in an individual retirement account (IRA) or 401(k) plan. Among those thinking about the short term, 72% want to sock away more money in an emergency fund.

Those who had a financial goal at the start of this year are, accordingly, in better shape than those who did not. Fifty-two percent of this group think they will be better off financially in 2017, 42% said they had pared down their debt, and 52% said their financial situation had improved from 2015.

“The fact is, people who make resolutions on money tend to feel better about the state of their finances and are generally in better financial shape than those who don’t,” says Ken Hevert, senior vice president of retirement at Fidelity. “The start of a New Year is the perfect time to review your financial plan. Even if you don’t like making specific resolutions, you can still resolve to identify financial areas that might need some improvement and make some smart financial moves before December 31.”

ORC International conducted the telephone survey of 2,015 people for Fidelity in October.

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