Hi Windsock and Thread, Re: Enron / 401k's
Newsweek ran the following cartoon regarding Enron:
Bush said, "I did not have relations with THAT company."
( Don't see how Bush is at fault for Enron's own inappropriate accounting, aside from letting accounting regulations slack, but the joke is funny.)
On another note, there are some recent discussions in the government around changing the 401k rules. One proposal is: restricting Employee investment in their company's stock (within their 401k) to 20%.
Assuming companies continue to offer incredibly limited investment options (i.e. forces 80% of investments into undesired Mutual Funds), this proposal would mean the other 80% must be invested in mutual funds the company selects, even if the handful of mutual funds the company offers are completely against the employee's preference. Go figure. Talk about creating liability issues for corporations.
Let's look at a WSJ article regarding some mutual funds:
"at Fidelity Destiny I and Fidelity Advisor Growth Opportunities...the well-respected manager of those two funds, shunned tech stocks, so he couldn't keep up with the highflying growth funds. Mr. Vanderheiden retired...in February 2000...replaced him with managers who piled late into technology--at just the time when Mr. Vanderheiden's more conservative investments would have soared. So investors who stuck with the fund missed out on the bull market nad got mauled in the bear."
After reading the above paragraph, it doesn't sound particularly fiducially responsible to FORCE people to invest 80% of their 401k into mutual funds that people don't want.
A better option is to open the system up and let folks invest their 401k into investments they feel are intelligent, such as a selection of several individual stocks of good companies. Forcing people to invest 80% of their money into company selected mutual funds led by buy-and-dump portfolio managers, doesn't sound smart.
Regards,
Amy J |
