The loss of 401K due to lost jobs should not be very significant. Unemployment went up by about 1%, viewing from the other side, the most we lost was 1% of the existing 401K accounts rate of investment, and that does not take into account that the total labor pool is still increasing at a rate of at least 1% per year, thus on the average, we lost only "growth" of the 401k source of money. The other potential loss (and thus redemption) is how employees allocate their funds in the 401K, and that is more dynamic since some can change allocations on a monthly basis.
Mind you, when that growth stop, markets will fall, since the market has an insatiable thirst for new liquidity. From memory, I just saw a new "statistics" claiming that currently, the Dow lose a point for each $.5 MM selling but to gain a point it needs $20 MM in buying (I hope I remember these numbers correctly, but the point is that you need bigger buying to get the market up, at least right now).
Zeev |
