More than one-third of Vanguard's 401(k) investors didn't lose money in 2008

For workers who are young, newly hired or lower-paid, falling market values are counteracted by the new cash pumped in with each payroll contribution. More than one-third of Vanguard's 401(k) investors didn't lose money in 2008, while 10% or less. These people were barely scathed by the stock-market crash.

In a UCLA study, a large sample of investors who filled out a risk-tolerance questionnaire for a major 401(k) provider. Only 7% described themselves as aggressive; yet 33% invest as if they are, putting 80% to 100% of their 401(k) into stocks.

• Among the more than three million 401(k) participants served by Vanguard Group, 17% were 100% in stocks in 2007; at year-end 2008, 16% still were
• Of the 11.2 million participants served by Fidelity Investments, 15% still have every penny in their 401(k) invested in stocks, including 14% of those between the ages of 60 and 64.
• The share of U.S. households that own stocks in any account has fallen from 53% in 2001 to around 45% in 2008
• Since 2007, 401(k) investors at both Fidelity and Vanguard have lowered the rate of new contributions they are putting into stocks.

"We had the most drastic market decline since the Depression, we nearly had a total collapse of the global financial system, and all that caused most people not to do much at all."

If you were one of the unfortunate few that sold low, if you relieved that the market has come back but question how to move forward from here, or if you just want a second opinion, the 401(k) Optimzer is for you.

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